Gift Aid small donations scheme
The Gift Aid Small Donations Scheme (GASDS) allows qualifying charities and Community Amateur Sports Clubs (CASCs) to claim a top-up equivalent to Gift Aid on small donations of money made without a Gift Aid declaration. A small donation is defined as a donation of £30 or less made in cash or using contactless technology, such as a contactless credit or debit card. Donations made by other methods of payment such as cheque or bank transfer do not count.
The maximum annual amount of small donations that can be claimed through the GASDS is the lower of £8,000 or 10 times the amount the charity receives in Gift Aid donations – known as the matching rule. The £8,000 limit allows charities and CASCs to claim Gift Aid style top-up payments of up to £2,000 a year.
Usually, to claim gift aid the donor must have paid Income Tax or Capital Gains Tax at least equal to the amount the charity wants to claim and must complete a gift aid declaration. However, under the GASDS charities can claim tax relief on cash donations of £30 or less without a gift aid declaration or even knowing the identity of the donor.
The Gift Aid Small Donations Scheme (GASDS) was introduced on 6 April 2013. The scheme allows qualifying charities and Community Amateur Sports Clubs (CASCs) to claim a top-up equivalent to Gift Aid on up to £5,000 of small donations of money made without a Gift Aid declaration. A small donationis defined as a donation of £20 or less in cash. Donations made by cheque, credit card, text or bank transfer do not count.
The aim of the GASDS is to allow charities to claim a Gift Aid style payment on donations received in circumstances where it is difficult to collect donors’ details (such as a bucket collection) or where donors may be reluctant to give them.
HMRC has recently published revised guidance to explain the time limits for charities and CASCs to apply for confirmation they can take over the claims history of a previous charity or CASC after a merger.