Small Charities Will Struggle to Claim under new Small Donations Scheme

  • Gareth Thomas, shadow minister for civil society, warns MPs that making claims under the planned Gift Aid Small Donations Scheme could be difficult for small charities.

    Charities that want to use the Gift Aid Small Donations Scheme could have to read almost 100 pages of guidance before they can do so, according to Gareth Thomas, the shadow charities minister.

    Thomas was speaking in Parliament during the committee stage of the Small Charitable Donations Bill, and said the bill had originally been intended to be easy and light on paperwork, but that it was now extremely difficult for small charities to use.

    The small donations scheme will allow charities to claim £1,250 a year in Gift Aid-like payments on donations without an individual Gift Aid declaration. But to qualify, charities must have claimed Gift Aid for three of the past seven years, have a good record with HMRC, and have claimed £1 in Gift Aid for every £2 they want to claim through GASDS in a year.

    Charity infrastructure bodies have said these requirements are too complex and should be scrapped.

    Thomas told fellow MPs on bill committee last week:

    There are 80 pages of guidance for a charity to claim Gift Aid. Further guidance will be published by HM Revenue & Customs about the implementation of this scheme.

    [There would be] close to 100 pages of guidance for a charity to claim Gift Aid and a small top-up payment.

    Thomas said that part of the problem was the decision to have HMRC run the scheme, and to link it to Gift Aid:

    Some of the briefing for this bill suggested that this small grants scheme was needed to help charities that were not claiming Gift Aid.

    We are now in the daft position whereby charities that do not claim Gift Aid cannot benefit from the bill.

    Thomas was speaking during discussion of a group of amendments aimed at exploring whether another body, such as the Charity Commission, could administer the scheme.

    George Mudie, Labour MP for Leeds East, said:

    The government is providing this scheme, which is expected to cost £100m.

    Because it has given it to HMRC to deal with, it is packed with all the worries and rules that HMRC comes with; they are part of its baggage.

    It is sheer silliness to give this light scheme to a department that comes with such detailed baggage.

    But Sajid Javid, economic secretary to the Treasury and the minister in charge of steering the bill through the House of Commons, said that since charities are already familiar with the Gift Aid rules, the scheme worked well as it stood.

    Source: Third Sector

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