Gift Aid Small Donations Scheme is a missed opportunity

23 May 2012     Last updated: 20 Jun 2014

A government scheme to top-up small donations through Gift Aid misses the mark, according to NICVA's response.


In the 2011 Budget, George Osborne announced a scheme to enable charities and sports clubs to top-up small donations through Gift Aid without the need for personal declarations. In March 2012, HM Revenue and Customs opened its consultation on the proposed scheme and, although welcomed initially by many commentators in the charity sector, the devil is in the detail.

NICVA has welcomed the intention of the scheme - which is to make it easier for charities and community amateur sports clubs to claim Gift Aid on donations of less than £20, for which it is difficult or impractical to get a Gift Aid declaration from the donor. The scheme in its simplest form could be worth up to £1,250 a year for each charity, which represents 20% of the maximum £5,000 worth of donations.

However, in NICVA's view the scheme is overly complicated and needlessly restrictive. Organisations new to Gift Aid will be unable to use the Small Donations Scheme unless they claim under normal Gift Aid rules for 3 years prior to claiming on Small Donations. They will also need to run a normal Gift Aid scheme alongside the Small Donations scheme so a small charity for example could not reclaim on its collection tins.

In its response NICVA restates its preference for a comprehensive review of Gift Aid and endorses a flat-rate scheme which would solve many of the problems which restrict the uptake of Gift Aid. NICVA is of the view this was a missed opportunity to really solve the problems with Gift Aid through a more comprehensive Gift Aid Bill.

NICVA's response in summary:

  • The new Bill should completely reform Gift Aid
  • The criteria to increase maximum claims for local groups is impractical
  • Organisations new to Gift Aid should not be excluded
  • The GASDS matching requirement should be dropped

NICVA's briefing paper and the HMRC Consultation was published on the NICVA website and comments invited on 3 May 2012. The HMRC consultation has run for 9 weeks from 27 March to the closing date for responses of the 25 May 2012.

Responses should be sent by e-mail to [email protected] or by post to: Consultation on the Gift Aid Small Donations Scheme, Room G67, 100 Parliament St, London, SW1A 2BQ.



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