The Small Charitable Donations Bill, which introduces a new scheme expected eventually to be worth at least £145m a year to charities, has received royal assent.
The legislation introduces the Gift Aid Small Donations Scheme, which will allow charities to claim a Gift Aid-like benefit on up to £5,000 of donations a year without individual paperwork. The scheme starts in the tax year 2013/14.
To claim under the scheme, charities must have made successful Gift Aid declarations in two out of the previous four tax years, and must have a clean record with HM Revenue & Customs. They must also claim £1 in Gift Aid for every £10 they wish to claim through the GASDS.
The measures have been watered down since the first committee stage of the bill, when the government proposed that charities would not be able to use the scheme unless they had claimed Gift Aid for three years out of the past seven, and that charities would have to claim £1 in Gift Aid for every £2 claimed through the GASDS.
Government figures, originally produced following the 2011 Budget, and revised following the Autumn Statement last year, show that the scheme is expected to cost £60m in the first year, rising to £135m by 2016/17. Full figures have not yet been released for the year after, but further projections in the Autumn Statement suggest it will rise to at least £145m.