Gift Aid

Government must not miss this open goal to help small charities

Follow the progress of the Bill via the hashtag #GASDS  

 Today, the House of Commons will be debating the Small Charitable Donations and Childcare Payments Bill. This is a Bill that seeks to improve the Gift Aid Small Donations Scheme (GASDS), which has been operation since April 2013 but has unfortunately failed to meet expectations since it was first announced in Budget 2011.

When the scheme was introduced in Parliament by the then Economic Secretary to the Treasury, Chloe Smith MP, she wanted it to distribute around £100m to charities – particularly small charities and improve use of Gift Aid. This scheme has not met any of the objectives set for it. The current estimate is that in 2015/16 the scheme distributed £26m to charities, less than a third of the original intention. The number of charities claiming Gift Aid has not significantly increased either, hovering between 60-70,000 charities per year throughout the lifetime of the scheme. Sadly, this Bill doesn’t go far enough and we are working with NCVO, Institute of Fundraising, Small Charities Coalition and others to try and improve it. But this Bill is a big opportunity to help small charities through a scheme which has cross-party support. Yet there is a very real risk that the government is going to miss this open goal. Here is a quick overview of the Bill.

The positives

There are some positive changes coming through the Bill. CFG has campaigned long and hard for the ‘eligibility criteria’ to be relaxed. We have consistently argued that if you are claiming Gift Aid, you should be able to claim through the scheme. But rules were written that charities had to claim Gift Aid successfully at least 2 of the previous 4 tax years, and charities had to exist for at least 2 years before they could use the scheme. They also had to claim Gift Aid successfully in 2 consecutive years. The Bill is scrapping these rules and this means that more charities will be eligible and will reduce complexity. In our consultation response, we called for all donations under £20 to be eligible for claiming through the GASDS. They haven’t gone as far as we would like, but they have allowed contactless payments to be claimed as a way to ‘future proof’ the scheme. Although this won’t help many small charities for now, it is something for the long term. Finally on the connected charities rules, the Bill is improving the scheme so that charities which have more than one ‘community buildings’ (e.g. churches, village halls, mosques), can claim up to £8,000 through GASDS for each community building. This will be particularly helpful for churches, which often have more than one church in each parish.

The missed opportunities

The progress is welcome but big areas have been ignored. Even with all the changes above, the government estimates that the GASDS will only distribute around £15m more to charities – still well below the original estimates. The matching rule, which mean that for every £1 claimed in Gift Aid, a charity can claim £10 through the GASDS – remains in place. This matching rule significantly disadvantages small charities and creates a real barrier for small charities that want to use the scheme, if they don’t do significant amounts of Gift Aid-able fundraising. These are precisely the types of charities that the scheme was trying to help.

We are calling for the government to scrap this rule, like it has done with the eligibility criteria, so that small charities are able to claim more through the scheme.

The government has also failed to extend the GASDS to cover all types of donations under £20 that do not have a Gift Aid Declaration. It says that it is doing this because it want GASDS to compliment Gift Aid. But it seems perverse to say by denying small charities the ability to claim through all donations routes, that it will encourage more small charities to use Gift Aid and support these organisations – many of which are struggling with funding cuts. Our view is that the most effective way to encourage Gift Aid is to get more small charities fundraising, seeing the benefits (which the GASDS provides) and then using this connection to promote pro-Gift Aid messages and building up their familiarity with the processes involved. So CFG will keep pressing for the government to extend GASDS to cover all donations, and help more small charities to fundraise.

The government has also ignored the connected charities rules, which mean that small charities which share objectives and trustees or are parts of national networks are not able to claim individually. This is particularly prohibitive to Scout groups, Guide groups and Cadet groups which need to raise funds locally and could find this scheme very useful.

Make your voice heard

Now is our chance to shape this scheme and make it fit for purpose. We are going to be lobbying MPs hard over the coming weeks, during what we expect to be a rapid legislative timetable and I’d encourage any charity that uses the scheme to contact their local MP and encourage them to speak up on this Bill and push for radical reform. We don’t get many chances to improve the way that these schemes work, so we need to use our Contact CFG’s policy team ( if you’d like to find out how you can support this effort.

This post was last reviewed on 27 February 2019 at 16:13
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