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Gift Aid small donation scheme

Starting April 2013, HMRC will introduce “GASDS” (gift aid small donation scheme). This is a new scheme to enable Gift Aid style payments on CASH DONATIONS where it is difficult to get a gift aid declaration (such as bucket donations or church “plate” donations.)

Charities and amateur sports clubs (CASC’s), will be able to claim cash donations UP TO £20 EACH, UP TO A MAXIMUM OF £5,000 in any one tax year. So, your church or CASC can claim up to £1,250 each year. (A quarter of £5,000).

This is in addition to their normal gift aid claims.

The conditions of the charity are;

– the charity and CASC has been established for the last 2 years
– has claimed Gift Aid in at least 2 of the last 4 years
– has not had a period of 2 or more years of not claiming Gift Aid in the last 4 years
– has claimed Gift Aid in donations of at least 10% of the amount of small donations on which top up payments are claimed in the same year
– has not incurred a penalty under Gift Aid in the tax year in which top up payments are claimed.

If a charity or CASC run their charitable activities in a community building, the maximum limit of £5,000 may be increased to £10,000 for small donations collected in each community building. Amateur sports clubs are unable to apply for this though. Not sure why.

Charities or CASC’s that are connected with one another will share between them the main £5,000 limit. However, donations may be pooled to allow one member of the connected charities to claim the top-up payment on the combined donations.

Claims on donations received under the community buildings rules are not affected by connected charities rules.

Note: Charities and CASC’s are defined as connected if their purposes & activities are the same or substantially similar AND controlled by the same person, or connected persons, or where one charity or CASC has control over another charity or CASC.

So I think this is a good thing for churches providing you are aware of it, and have good and simple record keeping. Excel is a great start. That is what I will be using, because I will be able to export the information to the new on-line Gift Aid returns HMRC are about to introduce in April 2013.

Peter