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Gift Aid Small Donations Scheme: a change in the rules for donations received after 5 April 2017

4 min

The Gift Aid Small Donations Scheme (GASDS) has been with us since 6 April 2013 and although widely welcomed at that time, the amount claimed under the Scheme to date is far lower than was envisaged by the government when the Scheme was introduced.

Partly to help address this lower take-up, and partly to address criticism that the eligibility criteria was restrictive; some of the rules of the Scheme have been amended for donations received after 5 April 2017. These changes are covered more fully in the GASDS briefing papers on our website, but this blog sets out the main changes to the Scheme and some of the implications which flow from them.

What has changed?

  • The two year eligibility period for start-up charities has been removed. This means that independent charity church plants will be eligible to claim under the Scheme from their first year of operation post April 5 2017.
  • The Gift Aid history requirements have been removed.
  • Contactless payments are now allowed.
  • There are significant changes to the way in which the community buildings rules operate extending the scope of eligible donations to include donations collected in the same Local Authority Area as the building.

What has not changed?
The small donations limit, which remains at £20 per gift.

  • The basic criteria for determining what represents a community building.
  • The ten times Gift Aid multiplier restriction (the “matching rule”).
  • The two year time limit for making GASDS claims.

The main implications for churches

  1. Church plants which are independent charities can start to claim under the Scheme immediately for any donations received after 5 April 2017 and do not have to wait for the two year start-up period to elapse. Combined with the removal of the requirement to have a Gift Aid claims record, this should help more churches be able to make a GASDS claim earlier than was previously the case.
  2. Because of the Gift Aid multiplier restriction, churches will still need to claim Gift Aid to be able to make a GASDS claim, but the need to have submitted claims covering at least two of the previous for years has been removed. Subject to the multiplier rules, churches can submit a GASDS claim so long as they have made a Gift Aid claim or claims on donations received under Gift Aid in the same tax year as the eligible small donations for which the GASDS claim is submitted. In practice, this means making Gift Aid claims within two years of the end of the tax year, despite the four year time limit for Gift Aid claims.
  3. Churches which operate out of less than two community buildings can claim a single GASDS allowance of £8,000 on any eligible donations received after 5 April 2017 from an individual anywhere in the UK. There is no longer any interaction between a single “core” allowance and the community buildings allowance.
  4. Churches which have the ability to receive “contactless” donations (we are not yet aware of any!), can include eligible donations made in this way within their GASDS claim.
  5. Churches which operate out of two or more community buildings have a choice; either to claim:
    • An £8,000 allowance on eligible small donations collected in each community building. The scope of a community building now extends to include donations collected in the same Local Authority Area in which the building resides; or
    • Elect for a single allowance of £8,000 for the church covering any eligible donation received anywhere in the UK

Particularly with the scope of community building donations being extended, it is quite difficult to imagine normal circumstances where a church would benefit from the single allowance election.

But remember
The same basic rules regarding the eligibility criteria of the donation itself has not changed.

  • Donations must be for £20 or less (reasonable procedures should be in place to ensure that larger gifts are excluded from a claim).
  • Other than 'contactless', donations still need to be in cash (notes and coins).
  • Donations must be banked into a UK financial institution.
  • Donations must not be received under Gift Aid. This is not normally an issue as most cash donations, for example a collection plate, can’t be traced back to an individual donor. Note however; where a donor has given the church a valid Gift Aid declaration; cash gifts from that donor are ineligible for the GASDS.

Briefing papers
Below are two new briefing papers covering small cash donations received after 5 April 2017. These include a number of different examples which help to demonstrate how the scheme applies to most church situations, and we would suggest that you take a look at these papers as we believe that they will be helpful to you.

Gift Aid Small Donations Scheme - a practical guide for donations received after 5 April 2017

Gift Aid Small Donations Scheme - a comprehensive guide for donations received after 5 April 2017

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