The government has launched a call for evidence on the Gift Aid Small Donations Scheme, with the intention to simplify the rules for charities.
HMRC's call for evidence follows an announcement at last month’s Autumn Statement that the government would be bringing forward the review that it had originally planned to commence in April next year.
The review has been made following concerns from charities that the current rules are too complex to administer.
The GASDS was originally intended to raise £55m a year, but raised only £23m, and charities have said this is because there is too much red tape for small organisations.
HMRC said the rules were designed to reduce the risk of fraudulent claims on public expenditure and as a result are fairly robust.
The call for evidence includes 16 questions that are centred round charities’ understanding and the accessibility of the scheme, as well as the eligibility conditions.
Andrew O’Brien, head of policy and public affairs at Charity Finance Group, said that the CFG is delighted that the call for evidence has been brought forward.
He said that the CFG, alongside NCVO and the Institute of Fundraising, is doing a survey of its members to ask them for their views to both help the evidence gathering exercise and to inform their own opinions.
He said: “The base line we are starting from is that we want quite bold changes to the relief, looking at matching requirements and whether that needs to be there. If it does, can we make it a smaller matching requirement - for example 1:1 rather than 1:4 - so we can claim larger amounts of GASDS?”
They are also looking in terms of the eligibility requirement. Currently a charity must have been in existence for at least two complete tax years, unless the charity has recently merged with another, to be eligible for the scheme.
O’Brien said: “Our view is that if you register for gift aid, surely that should be good enough to claim GASDS.
“We want them to look seriously at those proposals, but we know it’s the first stage of a long consultation, and the review will be taking place next year – hopefully early next year. We are going to be pushing the government to put a timeline in place for reviewing these changes.”
At the announcement that the call to evidence was to be brought forward last month, the Charity Tax Group said they see it as an “opportunity to make changes to make the scheme more accessible particularly for smaller charities which would help the scheme to reach its initial take up goals.”
Responses must be made by 2 March, more information is available here.
