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Extra changes to the small donations scheme could bring £15m a year for charities.

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Extra changes to the small donations scheme could bring £15m a year for charities.

Over the past few months, MP’s have been debating the Small Charitable Donations and Childcare Payments Bill; the most recent changes introduced by the Minister for Civil Society, Rob Wilson, are said to increase the uptake of the Gift Aid Small Donations Scheme.

Changes to the scheme could boost payments to charities by an estimated £15m a year. The Bill, which was introduced in the house of Commons in September this year, proposes changes to the scheme that include the removal of the two-year rule, under which charities need to have been registered for at least the past two years before being able to have access to the scheme.

The scheme which was introduced in 2013, allows charities to claim Gift Aid-like relief on up to £8,000 worth of small cash donations a year without having to submit extensive paperwork for every claim.

The bill also proposed removing the requirement for charities to have made successful Gift Aid claims in at least two of the previous four years; this would enable newly founded charities to access the scheme and allow small donations made by contactless payment to be covered by the scheme.

Rob Wilson told MP’s at the hearing that over 21,000 charities had used the Gift Aid Small Donations Scheme (GASDS) in 2015 and claimed a total of £26m. While he agreed this was lower than had been forecasted, he said moving forward, the government needed to ensure that as many charities as possible can benefit from the scheme.

The scheme has been criticised by many charities and charity bodies as being far too difficult for smaller charities to access and for low level of take-up, particularly among the charities it is primarily intended to help.

On Tuesday 13th December, it was announced that the bill had successfully passed through The House of Lords and will become law before the end of the year. However, MP’s warned that further reviews of GASDS would be necessary to ensure it was the most cost-effective way to support the sector and whether there were alternative, simpler ways of benefitting charities in the future.

Category: Sector news