HMRC has published its formal consultation on the Gift Aid Small Donations Scheme, with a deadline for responses of 1st July.
At Budget 2015, the Government announced an increase in the annual donations limit on which a charity can claim – from £5,000 to £8,000 from April 2016, and then brought forward a planned review into the scheme with a call for evidence launched last December.
It has now examined the responses and published its proposals. The key ones are as follows:
- A proposal to relax the Gift Aid history requirement so a charity would only need one year of successful Gift Aid claims (including in the previous tax year)
- A willingness to explore extension of GASDS to contactless payments (but not cheque/direct debit etc)
- Proposal to amend the community buildings rules to allow charities or a ‘group’ of charities to claim either under the main GASDS allowance or under the community buildings allowance, but not both. Charities receiving donations in multiple community buildings could make multiple claims under community buildings rules but not in addition to the main allowance
- Consideration of a relaxation in the definition of a community building to allow collections received outside of the building (in the community) to be included
- The Government is not minded to relax the 10 person element in the community buildings rules, because of concerns about fraud
- The £8,000 cap seems likely to remain for the time being and eligible donations will continue to be capped at £20
- Statistics that show that GASDS take-up has mainly related to Community Buildings so far (reflecting the high usage by churches) and that £23,475,000 was paid out in the tax year 2013-14.
The Government is inviting responses on a number of consultation questions:
- What would the impact on your charity be of the removal of the current legislative requirement that a charity must have been registered for at least two tax years (the two-year rule) before it can access GASDS? Would this change represent a meaningful simplification of the scheme?
- What would the impact on charities be if the requirement that a charity must have made a successful Gift Aid claim in at least two out of the previous four tax years (the two-in-four rule) was changed to a requirement that a charity must have made a successful Gift Aid claim in the previous tax year only?
- Does your charity currently collect donations using contactless payment technology, or are you currently considering doing so in future?
- Would the expansion of GASDS to include donations received via contactless credit and debit cards present any challenges to charities, particularly in terms of record keeping or other administrative requirements?
- Would the Government’s proposal to allow charities to claim either under the main GASDS allowance or under the community buildings allowance, but not both, present any specific equality issues or generate any obviously unfair outcomes?
- What impact would this proposal have on your charity?
- Would relaxing the community buildings rules to allow donations to be received outside of the building itself allow more charities to claim under GASDS?
- What reasonable requirements could be included to ensure that the relaxed community buildings rules still only benefit donations received in a specific local community?
- Are there any other reforms that you would like the Government to consider?
The Charity Tax Group has welcomed the proposals. CTG chairman, John Hemming, said:
“We welcome the proposals in this consultation on GASDS reform, which take forward a number of the key recommendations in CTG’s response to the Call for Evidence, including: a partial relaxation of the Gift Aid history requirement; clarification of the community buildings rules; and steps to future-proof the Scheme to accommodate new types of small donations.
“While the Scheme provides very useful relief – particularly for smaller charities – positive changes are required to improve uptake, which is still too low, and improve accessibility. We will continue to work with officials to improve guidance and ensure that there is less complexity for charities in the administration of the Scheme.”
The consultation document can read in full here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/517377/Gift_Aid_Small_Donations_Scheme-consultation.pdf
Responses should be sent by 1 July to email@example.com or by post to: GASDS Consultation, Room G/45, 100 Parliament Street, London, SW1A 2BQ.
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