Government must rethink 'complicated' Gift Aid scheme for small donations, sector leaders say

Charity Finance Group chief executive Caron Bradshaw says the scheme's limited eligibility will exclude those that need it most

Caron Bradshaw
Caron Bradshaw

The National Council for Voluntary Organisations, the Charity Finance Group and the Charities Aid Foundation have called on the government to rethink its plans for the Gift Aid Small Donations Scheme because they say it is too complicated.

A consultation on the measure, which was announced in the Budget last year, closes today. From April, the scheme will enable charities and community amateur sports clubs to claim a top-up payment at a rate equivalent to Gift Aid on small donations of £20 or less totalling up to £5,000 in a year.

In a joint response, the three organisations say they have significant concerns about the scheme in its current form. They say the rules are too complex and will therefore limit the potential of the scheme.

Caron Bradshaw, chief executive of the CFG, said: "The basic premise of this scheme has real potential to make a difference for the very smallest of charities. 

"However, as it is currently set out it will be too complicated to have a real impact. Eligibility for the scheme is limited and this will stop those that need it most from using it.

"We propose a rethink on how to implement GASDS to ensure it is easy to use, achieves its potential and doesn't further complicate Gift Aid."

The three organisation said rules around ‘connected’ charities would limit the benefits of the scheme and organisations such as hospices and care homes would be disadvantaged under rules affecting those running residential premises.

The Institute of Fundraising criticised the scheme earlier this week for being too bureaucratic.

Sir Stuart Etherington, chief executive of the NCVO, said: "We are concerned about HMRC’s design of the scheme. Even for those of us who spend a lot of time looking at Gift Aid, some of the restrictions are hugely complex to understand, and we fear this will be a barrier to charities taking part in the scheme.

"We are asking HM Revenue & Customs to reconsider the best way to deliver the scheme, so it will achieve their original objectives of helping charities and reducing bureaucracy."

A Treasury spokesman said: "The Gift Aid Small Donations Bill has been welcomed by many in the charity sector. It is intended to reduce the administrative burden and boost the income of small groups that rely on bucket donations."

He said the proposed requirement that groups have a three-year history of claiming Gift Aid in order to be eligible for the scheme was a sensible way of balancing access against the risk of fraud.

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