HMRC clarifies gift aid small donations scheme guidance

HMRC has issued updated guidance on the gift aid small donations scheme (GASDS) enabling a charity or community amateur sports club (CASC) to claim top-up payments on small donations up to £20, with revisions to the section covering community buildings

The guidance clarifies that the community buildings rules do not apply to community amateur sports clubs. However, there is no limit on the number of eligible community buildings that a charity can have.

Under the rules, from 6 April 2017, a charity with two or more community buildings, can claim a maximum of £8,000 on either: small donations collected anywhere in the UK; or small donations for each community building collected in the same local authority area.

Charities are free to choose the option that benefits them the most, but HMRC points out that a charity with fewer than two community buildings would do best to claim on small donations collected anywhere in the UK.

From 6 April 2017 charities can claim top-up payments on small donations collected at any time – they do not have to be collected, during a charitable activity. The community buildings rules will still apply.

Charities cannot charge a fee to enter the building (or the part of the building) where the charitable activities take place. These activities must include at least 10 people who will benefit from the charitable activity; take place at least six times a year; and be open to members of the public.

The guidance states that charities can claim top-up payments on donations collected in community buildings before 6 April 2017 for two tax years after the collection date.

Before 6 April 2016, the claim limit for a tax year was £5,000 on donations collected in each community building, or in the same local authority area.

The guidance states that if an organisation is connected to another charity or community amateur sports club, other rules apply.

Guidance Gift Aid Small Donations Scheme: how to claim top-up payments is here.

Report by Pat Sweet

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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