‘Half-hearted’ Small Charitable Donations Bill gains royal assent

17 Jan 2017 News

HMRC building

Fergus Burnett

The Small Charitable Donations and Childcare Payments Bill, a bill designed to help small charities raise more cash, has gained royal assent.

The bill is intended to make it easier for charities to claim a Gift Aid-like relief on up to £8,000 a year of cash donations, through the Gift Aid Small Donations Scheme, even if those donations are not accompanied by the normal paperwork.

GASDS was initially introduced in 2013, but it has raised far less for charities than was originally intended. Latest figures suggest that it raised £21m in 2014/15 – far less than the £135m the government had expected the scheme to be raising by 2015. 

The bill which gained royal assent today was introduced to remove some of the red tape which prevented charities claiming. But NCVO, the Charity Finance Group and the Charity Tax Group have all said more could be done to improve the bill.

Andrew O’Brien, head of policy and engagement at CFG, said the bill was “an incredibly half-hearted reform effort” and that government had just “chucked a few bones to the voluntary sector without trying to make the scheme work properly”.

The bill has dropped eligibility criteria which previously required charities to show they had been claiming Gift Aid for two years before they could use the bill. It has also extended the scheme to cover contactless donations, although not donations by text or cheque.

It has also loosened “community building” rules which allow charities to claim relief on more than one tranche of donations if they collect money for charitable activities in a particular building.

This will potentially allow the UK’s 35,000 scout and guide charities to each claim their own relief, instead of only one relief for the Scout Association and another for Girlguiding UK.

However GASDS still includes a matching requirement which requires charities to claim £1 of Gift Aid for every £10 claimed under GASDS – reported as a major barrier by many small charities.

 

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