Government eases rules for Gift Aid Small Donations Scheme

Sajid Javid, the Treasury minister, says he has listened to charities' concerns and made changes to the proposed scheme

Sajid Javid
Sajid Javid

The government has softened the eligibility criteria for charities to make claims under the forthcoming Gift Aid Small Donations Scheme.

The scheme, which will enable charities to claim Gift Aid-like payments on small donations totalling up to £5,000 a year without individual paperwork, is being introduced in the Small Charitable Donations Bill, which is going through parliament.

Government amendments to the bill, published today, say that to be eligible to claim under the scheme, charities must have made successful Gift Aid declarations in two out of the previous four tax years, rather than three out of the previous seven.

The amendments also reduce the matching requirement for the amount of Gift Aid that charities must claim in the same year: charities will have to claim £1 in Gift Aid for every £10 claimed under GASDS, rather than £1 for every £2 in Gift Aid as previously required.

During the committee stage of the bill, Sajid Javid, the Economic Secretary to the Treasury and the minister in charge of the GASDS, said he would re-examine the matching ratio after the shadow charities minister Gareth Thomas sought to scrap the matching clause in the bill.

A statement from Javid, issued after the amendments were tabled, said: "Charities have told us that they think the eligibility criteria for this scheme is too tough. We’ve listened to those concerns and have outlined changes to make the GASDS even more accessible."

Karl Wilding, director of policy and research at the National Council for Voluntary Organisations, said: "I think the amendments will help small charities. The optimum outcome is still that the eligibility period should be abolished, but this is a step in the right direction."

The NCVO and other organisations, including the Charities Aid Foundation, the Institute of Fundraising and the Charity Finance Group, have been calling for the matching requirement to be dropped.

"We wanted the matching ratio to be abolished but this is a very welcome shift to 10:1," said Wilding.

Wilding said he would still like to see further changes to the bill as it goes back for debate in the House of Commons on Monday, particularly to remove complex ‘community buildings’ rules.

These rules allow charities with multiple local branches to claim GASDS payments at each branch, but require donations to be collected in a "community building".

A spokeswoman for CFG said: "We are pleased that the government recognises some concerns raised around accessibility to the scheme. However, there are still problems with some of the fundamental principles of the scheme design that lead to complexity and will present significant barriers to charities that would otherwise be interested in using it. 

"The community buildings rules are integral to allowing the scheme to be fairly accessed by organisations with a range of structures across the sector; but, at the moment there are some unexplained and highly debilitating restrictions on the donations that can actually be claimed on. This needs to be addressed so that many organisations are not unfairly disadvantaged."

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