Small Donations Bill: Will your charity be able to benefit?

The new Small Donations scheme is supposed to be good news for charities. When it was originally launched by the Chancellor, he said that it would deliver “Gift Aid on the contents of the collecting tin and the street bucket“.

In practice, the Bill does not do quite what it says on the tin. Due to restrictions in the Bill, we are concerned that fewer charities will be able to benefit from the Scheme than the Chancellor originally intended.

Given that the maximum limit per charity is £1,250 (on £5,000 of small donations), we had particularly expected that the Scheme would be of benefit to smaller charities – often those who rely most on collecting tins and street bucket collections. But as it stands, we think these are the charities that will be most likely to lose out.

We have just five days to make a difference – please read on.

So, will your charity be able to benefit from the Small Donations Scheme?

As the Bill stands, there are a number of eligibility restrictions. To use the Scheme, charities will have to:

  • Be registered with HMRC for Gift Aid;
  • Have a three year track-record of using Gift Aid;
  • Claim at least £1 in regular Gift Aid for every £2 they seek to claim through the new Scheme (we’re referring to this as the ‘matching requirement’).

If the charity has a group structure, there are further restrictions. Local groups of a parent charity will only be able to claim if:

  • They operate out of a ‘community building’;
  • Donations are made during the course of their charitable activities within the building, by a group member;
  • While at least 10 people are present, at least six times a year.

While NCVO and other sector bodies recognise HMRC’s priorities to prevent fraud and manage the costs of the Scheme, we feel that many of these restrictions are disproportionate. They will limit the relevance of the Scheme for many of the charities who had hoped to benefit from it.

What can you do?

There are only five days left to take action – the final reading will be in parliament on Monday 26th November.

You can make a difference by contacting your MP today, by email or twitter, and drawing these issues to their attention.

When you contact them, we would suggest that you:

  • Tell them if your charity could be affected by these restrictions;
  • Ask them to back amendments that will make the Scheme more accessible for charities;
  • Send them this parliamentary briefing paper (PDF, 431 KB) that NCVO, CAF, IoF and CFG have published today.

NCVO Policy Team’s blog

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Charlotte Ravenscroft was NCVO’s head of policy and public services. Charlotte’s wrote about funding, public service delivery, and strengthening the evidence base for voluntary action. She has also worked at The National Lottery Community Fund and the Department for Education.

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