Only £7m has been claimed under the gift aid small donations scheme in its first year of operation, just a fraction of the original government estimate, according to figures released today by HM Revenue & Customs.
The government had said the scheme would raise £55m for charities in the first year, rising to £130m a year by 2017/18.
More organisations could still put in claims for this year, because they have until March 2015 to make a claim, meaning total claims in respect of this tax year could rise. However the total amount claimed for this year is still likely to be several times lower than originally estimated.
The scheme, introduced last year in the Small Charitable Donations Act, allows charities to claim gift aid-like relief of up to £1,250 on up to £5,000 a year of cash donations, even if they do not have the normal paperwork.
In order to claim it, charities must sign up to Charities Online, the new web-based system for claiming gift aid.
The GASDS was intended to help small charities such as churches which receive a lot of income in cash from collections. However take-up among these organisations has been lower than expected.
In order for the value of the relief to hit government estimates, at least 44,000 organisations would have had to use it.
Helen Donoghue, director of the Charity Tax Group, said that it was not possible to judge how effective the GASDS had been until all claims had been submitted for the year.
Other tax reliefs up, but less than predicted
HMRC figures also showed that other tax reliefs to charities and donors rose by £310m last year to £4.36bn, £50m less than predicted earlier in the year.
More than half the increase can be put down to a £160m rise in stamp duty land tax relief, from £150m to £310m, which HMRC said was down to a single large transaction.
Gift aid remained at £1.06bn, the third year in which the figure has fallen or remained static. HMRC attributes the fall in gift aid values to the end of transitional relief, which was introduced in 2008 to compensate when the basic tax rate fell from 22 per cent to 20 per cent.
