HMRC has published a new consultation on potential reform options for the Gift Aid Small Donations Scheme (GASDS). It builds on the recent Call for Evidence which sought views on how the scheme is working and how it could be improved.

GASDS enables eligible charities to claim a Gift Aid style top-up payment on up to £8,000 of small cash donations per year.  Prior to 6 April 2016 this limit was £5,000 per year.

In addition, eligible charities can claim top-up donations of £8,000 on small donations collected during activities carried on in a community building such as a church or village hall.  A charity can claim up to the limit in respect of each of its community buildings every year, subject to certain conditions.

In this consultation the government is proposing changes to the eligibility rules.  Currently, in order to access the GASDS scheme, charities must have:

  • Been registered for at least two full tax years (the two year rule).
  • Made Gift Aid claims in at least two of the previous four tax years (the two in four year rule).

HMRC proposes that these rules be relaxed, so that

  • The two year rule is removed
  • The two in four year rule is replaced so that charities only need to have made a Gift Aid claim in the previous tax year to access GASDS.

Other proposals include:

  • Possible reform of the community buildings rules which would see charities being able to claim under the main GASDS allowance or the community buildings allowance, but not both.
  • Possible changes to the definition of “small cash payment”, to include donations made by contactless credit and debit cards.  The government do not intend to bring payments by way of text, cheque or direct debit within the GASDS regime.

The consultation closes on 1 July 2016.


Small Charitable Donations repayment scheme

HMRC Consultation document: Gift Aid Small Donations Scheme

HMRC: Gift Aid Small Donations Scheme – a call for evidence


16 August 2016: HMRC have now released their response to this consultation.  Our summary of this can be found here.