The GASDS was introduced from 6 April 2013 to allow charities to claim ‘top up’ payments on cash donations (cheques, credit & debit card donations do not qualify) where it would not be feasible or practical to obtain a gift aid declaration. The aim was to relieve the burden of record-keeping for smaller charities, specifically the requirement to obtain and retain gift aid declarations.
Restrictions were placed on the total amount of GASDS that could be claimed each year (£2,000 on donations of £8,000 from 6 April 2016) and the charity had to have been established for tax purposes for at least two year before the year of claim, the ‘two year rule’ and meet the following additional criteria
- Have made a successful Gift Aid Claim in the tax year that GASDS is being claimed
- Not received a penalty in the last 2 years
- Made a Gift Aid claim in at least 2 of the last 4 years without a 2-year gap between claims, the ‘two out of four’ rule.
Charities that operate in more than one building may be able to claim more GASDS under the ‘community buildings’ scheme. To qualify, each community building must have hosted at least 6 charity events attended by at least 10 people.
In reality, charities already registered and claiming gift aid with procedures in place have been the ones to take advantage of the scheme. The GASDS scheme was not taken up by as many small charities as was hoped as the restrictions were still too onerous for smaller charities with limited resources to administer the scheme. Newly registered charities were also forced to wait to claim under the ‘two year rule’. The government brought forward a planned review of the scheme and some significant changes have been made to the scheme with effect from 6 April 2017:
- The requirement to have made a gift aid claim in 2 of the last 4 years has been dropped
- The ‘two year rule’ has been dropped
- Contactless card donations of £20 or less can now be included
- Collections made in the same council area as the community building will qualify for GASDS, opening up the scheme to street collections.
These changes should make the scheme more attractive to small charities but only time will tell. Charities still need to make at least one gift aid claim each year to gain access to GASDS. It will be interesting to see if the amount claimed under the scheme increases in the next few years or whether charities still think that the costs of administering the scheme outweigh any benefits.
Get in Touch
For additional information about the Gift Aid Small Donations, please contact our Head of Not For Profit department, Nicola Ferriday; firstname.lastname@example.org. Alternatively, you can call the office on 01923 224411.