Small Charitable Donations repayment scheme

What is the Gift Aid Small Donations Scheme (GASDS)? How does it work?

This is a freeview 'At a glance' guide.

Subscribers: see the GASDS tab in our Gift Aid guide for more detailed content.

From 6 April 2016 charities are able to claim a Gift Aid style top-up payment on up to £8,000 of small cash donations per year without the need to obtain Gift Aid declarations. 

Charities are eligible to join the scheme if they have:

• Claimed Gift Aid in the same year as the GASDS claim.
• Not incurred a penalty on a Gift Aid or GASCS claim in the current or previous tax year.

Key features of the Gift Aid Small Donations Scheme (GASDS):

• Donations must be no more than £30 per donation (£20 prior to 6 April 2019).
• Donations must be in cash or via contactless card, not cheques or any other payment form, and must be banked in a UK account. 
• No benefit must attach to the donation, but you may give out a badge or sticker of negligible value.
• Donations that are made with a Gift Aid declaration are excluded, as are membership fees.
• The top-up is calculated as the cash donation x basic rate tax % / 100 less basic rate tax %.

The maximum amount of the claim is the lower of:

• 10 x Gift Aid donations or £8,000 and
• The amount of the small donations received.

This means that the maximum a charity or Community Amateur Sports Club (CASC) will be able to claim a repayment of is £2,000 per year (on £8,000 of qualifying donations).  

Basic example:

Furry Pets Trust (a very small charity) receives £450 in cash donations from its collecting box in a local pet shop. It also receives £700 in Gift Aid donations in 2022-23. It meets all the other qualifying conditions. The maximum donations that the charity may include in its top-up claim is the lower of:

• 10 x £700 (£7,000) and £8,000, and
• £450.

The claim is restricted to £450 x 20/80 = £112.50.

Collections in community buildings

Charities can also claim a top-up payment on up to £8,000 of small donations collected during charitable activities held in a community building such as a church or village hall. 

From 6 April 2017 small donations received outside the community building, but within the local authority area, also qualify for GASDS.

• Charitable activities must be held in community buildings at least 6 times in a single tax year.
• A charitable activity must include at least 10 people who will benefit from the activity and be open to members of the public.
• Entry fees cannot be charged.
• Activities carried out primarily for the purposes of fundraising such as jumble sales, concerts and dinners don’t count.
• CASCs cannot claim a top-up on donations collected during activities in community buildings.

A charity that carries out charitable activities in two community buildings can claim a maximum top-up on small donations of either:

• £8,000 collected in each community building or
• £8,000 collected anywhere in the UK.

If top-up payments for each community building are claimed, then only small donations collected in the same local authority area will be eligible for top-up payments.

For example:

Furry Pets Trust (a very small charity) receives £4,000 in collection boxes around town, receives £2,500 of small donations during its monthly charitable activities held in a village hall, and £3,000 of small donations collected during charitable activities held every other month in a local church.  The charity can claim a top-up in respect of either the £4,000 or the £2,500 and £3,000.

Compliance

Charities have to observe the detailed qualifying conditions and also need to ensure that:

• They are not double counting some cash donations that are made by donors who have already signed enduring Gift Aid declarations.
• They are not claiming GASDS on donations made of more than £30 per individual.

For small donations, charities must record total cash donations collected, date of the collection and the date it was paid into a bank account. Records must also be kept of any contactless card donations (e.g. card machine receipts). 

For community building collections, charities must also record the address and postcode of the event, the type of event, the number of events held, and an estimated number of beneficiaries who attended.

External link

HMRC guide: Gift Aid Small Donations Scheme