Government issues call for evidence on Gift Aid Small Donations Scheme

HMRC says in the consultation document that the government wants to simplify the scheme and increase the number of charities that can claim

Small donations: plans to simplify Gift Aid scheme
Small donations: plans to simplify Gift Aid scheme

The government has published its call for evidence on the Gift Aid Small Donations Scheme.

In the document, published today, HM Revenue & Customs says the government wants to simplify the existing small donations scheme and increase the number of charities that can claim.

The GASDS allows charities to claim Gift Aid-like relief on up to £5,000 of small cash donations each year without individual paperwork. The limit is due to be raised to £8,000 in April.

The call for evidence invites respondents to comment on how the scheme works and on the rules in areas including eligibility, community buildings and connected charities, which are designed to stop charities splitting into smaller entities to make larger claims.

The consultation was originally expected in 2016, but the government announced in the comprehensive spending review last month that it would be brought forward to December.

The scheme was launched in 2013, and HMRC’s consultation says the rules "were designed to reduce the risk of fraudulent claims on public expenditure and as a result are fairly robust". But it says that some charities find the rules complex to administer.

The call for evidence describes the scheme’s main policy objective as providing top-up payments in cases where Gift Aid declarations would be "unduly burdensome or difficult to obtain", such as bucket or church plate collections.

Charities are eligible for the small donations scheme if: they have existed for more than two complete tax years, unless they have recently merged; theyhave made a successful Gift Aid claim in two of the past four years, albeit with a gap of less than two years between claims; they have not been penalised for a Gift Aid or small donations scheme claim in the current or previous tax years.

The consultation runs until 2 March.

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