The Gift Aid Small Donations Scheme is a great way to maximise the value of donations to your charity or Community Amateur Sports Club (CASC).
Introduced in 2013, the scheme allows eligible charities and CASCs who already claim standard Gift Aid to reclaim 25% on small cash donations of £20 or less without needing to have a Gift Aid declaration in place. This makes it an ideal way to boost the value of bucket collections or collections made during a religious service, where it is impractical to collect the donor details usually required to make Gift Aid claims.
Moore Stephens charities specialist, Partner Carolyn Rossiter says: “With charities and CASCs able to claim 25p for every £1 donated, the scheme can provide a great source of additional income. At the moment, you can claim on small cash donations up to a total value of £5,000, meaning an additional income of up to £1,250 each year. From April 2016, this limit is set to increase to £8,000 so charities and CASCs will be able to benefit from up to £2,000 on top of the money donated.”
Carolyn continues: “Unlike claims made under the standard Gift Aid scheme, with the Small Donations Scheme there is no need to collect donor details or to establish that the donor is a UK Income Tax payer. However, charities and CASCs still need to keep accurate records, including the total cash donations collected, the date of the collection and the date it was paid into a bank account. Records should be kept for at least six years from the end of the tax year to which they relate.”
It should be noted also that there are further rules around how the Gift Aid Small Donations scheme operates in relation to collections during a religious service. Says Carolyn: “Churches and other places of worship fall under the community building rules and must therefore meet additional criteria around the type and location of the venue, the number of people present at the service and the number of services held each year. Charities should seek additional advice if they plan to use the scheme in this way.”
For further advice in relation to charities or Community Amateur Sports Clubs, please contact Carolyn Rossiter
on 01733 397300.