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Increase in small donations limit for Gift Aid and the Small Donation Scheme

27/02/2019

The limit of small donations is set to rise from £20 to £30 under the Gift Aid and the Small Donation Scheme (GASDS). Lodders’ Charity Law expert, Mark Lewis, explains.

Changes

Following the Autumn 2018 Budget, the government has announced plans to increase the maximum amount an individual can donate in cash or by contactless under GASDS to £30. This aligns GASDS with the limit to contactless payments in the United Kingdom.

The change will be made by Statutory Instrument under the powers contained in s.17 of the Small Charitable Donations Act 2012. The Small Charitable Donations Act (Amendment) Order 2019 has been laid before the House of Commons. Once approved it will amend paragraph 1(1) and 1(2) of the Schedule to the existing statute to increase the maximum donation limit.

The change will take effect after 6th April 2019.

The Gift Aid and Small Donation Scheme, introduced by the Small Charitable Donations Act 2012, was intended to reduce the administrative burden for donors and charities wanting to claim tax relief on small cash donations.

Current law

Since 6th April 2013 eligible charities have been able to claim top-up payments on small cash donations they receive of £20 or less without having to obtain a Gift Aid declaration or provide an audit trail back to donor’s tax record.

From 6th April 2016 the maximum amount of small cash donations that a charity can claim top-up payments for in any tax year under GASDS has risen from £5,000 to £8,000.

Small donations made by contactless payment mechanisms have also been included in the scheme.

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Find out more

To find out more about this article, please contact Mark Lewis on 01789 206135 or via email.