Restrictive eligibility requirements, low awareness and the perceived complexity of the Gift Aid Small Donations Scheme have contributed to its low take-up rates, four charity representative bodies have told the government.
In response to a government consultation on the GASDS, which closes today, the National Council for Voluntary Organisations, the Charity Finance Group, the Institute of Fundraising and the Small Charities Coalition have called for a number of reforms to the GASDS to help increase take-up, including measures to simplify access to the scheme.
The GASDS allows charities to claim Gift Aid-like relief on up to £5,000 of small cash donations each year without supplying individual paperwork, but take-up has been lower than expected.
Provisional figures released yesterday by HM Revenue & Customs showed the GASDS raised £26m in the 2015/16 financial year, compared with £21m the year before.
This is substantially below initial government expectations for the scheme, which anticipated £60m being claimed under the scheme in 2013/14, its first year of operation, rising to £135m in 2016/17.
The response to the consultation calls for the matching requirement, under which charities must claim £1 in Gift Aid for every £10 claimed under the scheme, to be scrapped.
It says that the government has not reviewed the matching rule comprehensively and calls the rule "one of the most significant barriers to access for smaller organisations".
The response also suggests expanding eligibility requirements to enable any charity that has claimed Gift Aid in one of the previous four years to claim under the GASDS, with any small donation under the £20 also made eligible.
The two-year rule, whereby charities need to have been registered for Gift Aid for the previous two years before claiming under the GASDS, should also be scrapped, the response says.
It says that small donations made by all payment methods, including contactless payments, should be made eligible for the GASDS. There are a number of payment methods, including cheque and contactless payments, that are not currently eligible for the scheme.
In a statement, Andrew O’Brien, head of policy and engagement at the CFG, said "tinkering around the edges" of the GASDS was "simply not enough".
He said: "The government has talked a lot in the past about how it wants to help small charities. Now is its chance to prove that it means what it says. Let’s hope it doesn’t duck this opportunity."
In a separate response to the consultation, the Charity Tax Group called for changes that would improve access to the scheme and said the maximum GASDS donation should be increased in line with the £30 contactless maximum.
It also said better examples of how the GASDS affected small charities should be added to guidance to increase understanding of the scheme.
John Hemming, chair of the CTG, said he hoped the changes would increase accessibility.
"We encourage the government to review the effectiveness of any policy reforms and consider further simplifications, if there is no significant additional take-up," he said.
The Small Charitable Donations Bill, which will amend the GASDS, was announced in the Queen’s Speech earlier this year.