Introduction »

GADZOOKS!

You may have read that the Government is trying to help small charities with fundraising. This is through a new scheme, the Gift Aid Small Donations Scheme (GASDS).

The suggestion is that from April 2013, charities that receive small cash donations of up to £20 will be able to apply for a Gift Aid style repayment without the need to obtain Gift Aid declarations for those donations. Donations under a 'payroll giving' scheme are excluded.

The amount of donations on which the new repayment can be claimed will be capped at £5,000 per year, per charity. At the present basic rate of 20%, this will provide the charity with up to £1,250. In order to qualify, charities will need to have been recognised by HMRC for Gift Aid purposes for at least three years, have been operating Gift Aid successfully throughout that time and have a good tax compliance record.

The scheme will differ from Gift Aid in a number of ways. The key points are:

• there will be no documented link between the donor and the payment
• charities (also Community Amateur Sports Clubs (CASCs)) must meet certain conditions in order to become eligible to make claims under the GASDS, including having a, recent, track record of making Gift Aid claims
• claims will be based on the tax year from 6 April
• claims must be made within one year of the end of the tax year in which the small donations are collected
• the amount of claims that can be made will be limited to a maximum of £5,000 of small donations for all CASCs and most charities
• charities and CASCs must continue to make Gift Aid claims if they wish to make a claim under GASDS
• charities and CASCs must bank the small donations in a bank branch physically located in the UK and
• gifts are not deductible when calculating an individual's income for income tax so, taxpayers will not be able to claim tax relief on the donations.

We will keep you informed of how this progresses over the next few months.

Introduction »