The government could consider raising the limit for the Gift Aid Small Donations Scheme above £30 as part of attempts to futureproof the Gift Aid system, the minister responsible has said.
Robert Jenrick, Exchequer Secretary to the Treasury, told the Charity Tax Group’s annual conference yesterday that he was keen to avoid tying the GASDS limit to the maximum amount payable on a contactless card, currently £30, because the government was unsure how the technology would develop in the years ahead.
The government would instead "see if there is sufficient public trust and support for us increasing it", said Jenrick.
The Budget last year raised the donation limit to £30 in line with the contactless payment limit and the government estimated the move would cost the public purse an additional £5m a year.
The scheme generated an additional £30m for charities in 2017/18, way below the £100m a year the government expected it would raise when it was first introduced in 2013.
Jenrick told delegates that the government would consider how it could boost Gift Aid in the future, amid research from HM Revenue & Customs that shows £560m worth of Gift Aid is lost to the charity sector every year.
He said: "We appreciate that the way people are giving to charities is changing. It is increasingly online. We are very aware of that and would like to work with you to see if there are ways we can ensure that people continue to tick the Gift Aid box but in a modern way – online.
"If there are technological solutions hat could help to simplify the process or make it more fit for purpose, we are very happy to have your views on that and see if we can move it forward."
Jenrick said there was a possibility of reforms being made to charity tax after Brexit in areas such as VAT, although he warned that this was not likely in the short to medium term.
"I think it will be an opportunity for a future Chancellor to look at some of those areas and see whether we can simplify them," he said.
"Clearly the charity tax situation needs to be considered within that."
When questioned on reforms to probate fees – which some estimates have said could cost the charity sector £10m a year – Jenrick the government was unlikely to make any further changes.
"Our view has been that it is an essential way to fund the costs of the system, and we know that all parts of the system are under a degree of pressure, particularly in respect to unprotected areas such as the Ministry of Justice," he said.
"It has been reviewed and the proposals have been changed to make them less egregious, as some people were saying at the time. I suspect it will happen, and the government does not have any intention of changing again."
The recent decision by JustGiving to remove its fees was welcomed by Jenrick, who has previously called on online fundraising platforms to drop their fees.