The government expects that charities will be able to make online claims for Gift Aid from April next year.
A ministerial statement today by Sajid Javid, who replaced Chloe Smith as economic secretary to the Treasury in the reshuffle last week, asks for parliamentary approval for £250,000 to enable HM Revenue & Customs to put the system in place.
Javid says that charities will be able to use the system to make claims for Gift Aid and claims under the Gift Aid Small Donations Scheme. The GASDS will allow charities to claim Gift Aid-like payments on small donations totalling up to £5,000 a year without individual paperwork from April and is being introduced in the Small Charitable Donations Bill, currently going through parliament.
Javid said he was asking for the money now because if implementation was delayed until after the bill gained royal assent it would cost an additional £1.3m – largely because of increased testing costs.
This means developers can include the GASDS into the online filing system from the start rather than introduce it later, which would dramatically increase costs.
Javid said he wanted £150,000 of the £250,000 urgently to allow work to begin on developing the elements of the system that are unique to the new scheme."Starting the work early gives the IT provider sufficient lead-in time to have the IT ready for the start of the Gift Aid Small Donations Scheme in April 2013," he said.
Karl Wilding, head of policy and research at the National Council for Voluntary Organisations, welcomed the move.
"We have been calling for Gift Aid modernisation for some time," he said. "It is good to see that this is being taken forward because it is in the interests of everybody to have a system that works better and costs less."
But he said that if the scheme was to be introduced in April, charities would need time to prepare "so we look forward to working with HMRC on that."
The NCVO and other sector bodies have been calling on MPs to make changes to the GASDS because they say it is too complex. The NCVO said last week that it had lined up several MPs to introduce amendments to the bill at the committee stage, which is expected to start on 16 October.
Wilding said he hoped that any changes introduced to the GASDS at the committee stage could be incorporated in the online filing system without too much difficulty.