Gift Aid Small Donations Scheme: An opportunity lost

Last week, the Small Charitable Donations and Childcare payments Bill had its first reading in parliament. This follows the recent consultation response published by HMRC on the Gift Aid Small Donations Scheme (GASDS).

The scheme is a great idea with real potential – it allows charities to claim Gift Aid on donations under £20, without having to collect or process declaration forms. But smaller charities in particular are struggling to benefit.

In partnership with CFG and IoF, we launched a survey to find out what’s stopping charities from using the scheme to claim Gift Aid. We listened to your concerns, and made the case (PDF, 700kb) for a simplified system that scrapped onerous requirements.

Some useful changes have been proposed around eligibility requirements and new payment methods. But the government has not addressed our key concern: the matching requirement will remain entirely unchanged and continue to prevent smaller organisations from accessing the scheme. This is disappointing news for small charities – 50% of respondents to our survey with an income under £10,000 wanted the matching required reduced or removed.

Helpful changes

We’re pleased to see government responding to some of our recommendations. With the Small Charitable Donations Bill now laid before Parliament, they have committed to the following reforms:

Scrapped: The ‘two year’ rule

A charity no longer has to exist for at least two years before claiming – new charities can now use the scheme to help them fundraise.

Removed: The ‘two-in-four’ rule (the history requirement)

A charity no longer has to make a valid gift aid claim in two of the previous four years – charities that infrequently make gift aid claims can now access the scheme more readily.

Included: Contactless payments

Contactless donations will be eligible for Gift Aid claims under the scheme. It’s early days for this technology, but this gives charities the flexibility to claim as the use of contactless grows.

NCVO welcomes these improvements

But the government could do so much more – with new legislation on the horizon, this is the ideal opportunity to make sure the widest possible number of charities can benefit. For this to happen, the matching requirement must be repealed.

Matching rule – our concerns

Charities can only access the GASDS if they have made a certain volume of Gift Aid claims. In practice, this means a charity needs to claim £1 of Gift Aid through the traditional system (ie with a declaration) to claim £10 via the small donations scheme. This ‘matching requirement’ makes it more difficult for smaller charities to access the scheme, as they often have fewer resources to collect or process Gift Aid declarations, and many struggle to meet the requirement.

Next steps – how you can help

Removing the matching requirement is the key way to enable more charities to access the scheme. Now, more than ever, there is great uncertainty throughout the funding landscape. And with the Small Donations Bill on the table, now is the time to enable all charities to diversify their funding using the scheme. If your organisation would benefit from a simplified GASDS, we encourage you to contact your MP and highlight the difference it would make. Let’s hope this vital opportunity is not lost.


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Kimberly McIntosh was trainee policy officer at NCVO. She worked on the Freedom of Information response and administered the Campaigning Advisory Group secretariat.

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