The Financial Secretary to the Treasury, Jane Ellison, has responded to a written question by Andrew Gwynne MP (Lab, Denton and Reddish) calling for an estimate of the difference between the amount raised from the Gift Aid Small Donations Scheme (GASDS) and the amount estimated to have been raised from that scheme by the second half of 2016 at its introduction.

Jane Ellison: “The Gift Aid Small Donations Scheme was introduced to allow charities and Community Amateur Sports Clubs to claim a Gift Aid style top-up payment when it is not practical or feasible to collect a Gift Aid declaration. It was estimated to cost the Exchequer £105 million for the tax year 2015-16. The actual cost was £26 million.

“Although claims have been lower than anticipated, this is still a relatively new scheme, and continues to achieve year on year increases in the number of charities claiming.

“The Government wants as many charities and Community Amateur Sports Clubs as possible to benefit from the scheme, which is why it has introduced the Small Charitable Donations and Childcare Payments Bill. This will remove a number of the eligibility requirements making it much simpler and easier particularly for smaller and new charities to claim.”

The Charity Tax Group has regularly highlighted to HMRC that one reason for the low take-up of the scheme has been the relatively stringent eligibility criteria. While the Government is legislating to get rid of the Gift Aid history requirements, the 10:1 Gift Aid matching requirement remains. When asked in a written question by Andrew Gwynne whether the Government would consider extending this matching requirement, Jane Ellison gave the following response:

Jane Ellison: “The Small Charitable Donations and Childcare Payments Bill relaxes the eligibility criteria for the Gift Aid Small Donation Scheme. These changes will ensure that the Scheme operates effectively and flexibly for a greater number of charities and a greater number of donations.

“The Government has no plans to extend the Gift Aid matching requirement.“

For more information on GASDS click here. HMRC’s online guidance can also be accessed here.