HMRC have introduced a new scheme from 6 April 2013 for charities and Community Amateur Sports Clubs (CASCs) to claim top-up payments from HMRC on small cash donations of £20 or less. This is in addition to the Gift Aid scheme which has not changed. The Gift Aid Small Donations Scheme or GASDS could apply for example to cash collected in street collections or at religious ceremonies by charities or CASCs.
A charity or CASC will be able to use the scheme if it:
- is a charitable trust or a charitable company, recognised by HMRC as a charity for tax purposes or a CASC;
- makes claims under Gift Aid;
- has existed for at least the last two complete tax years (6 April - 5 April);
- has made a successful Gift Aid claim in at least two out of the last four tax years, without a gap of two or more tax years between those Gift Aid claims or since the last claim made; and
- has not incurred a penalty on a Gift Aid or GASDS claim made in the current or previous tax year.
Claims can only be made for small cash donations in notes or coins of up to £20 – donations by cheque, credit card, text or bank transfer do not count.
The amount a charity or CASC can claim depends on the amount claimed under Gift Aid and is subject to a maximum of £5,000 of donations which would produce a top-up payment of £1,250. For every £1 of Gift Aid donations that a charity or CASC claims on, they can claim on £10 of GASDS donations up to the maximum of £5,000. This is called ‘matching’. The top-up rate is based on the basic rate of tax income tax, currently 20%, and is calculated at 25% of the qualifying small donations up to the limit of £1,250.
GASDS is not a tax relief, so higher and additional rate taxpayers will not be able to claim tax relief on their GASDS donations.
More information can be obtained from HMRC.
If you require further help please contact us.
