The Small Charitable Donations Bill is before Parliament today. The purpose of the proposed legislation is to allow charities and community amateur sports clubs to claim top-up payments on small donations of up to £5,000 without needing Gift Aid declarations. The scheme is to be called the Gift Aid Small Donations Scheme and it is proposed that it will operate from April 2013. The bill can be viewed at Small Charitable Donations Bill.

A Treasury spokesman commented:

“The Government is committed to encouraging charitable giving and building a more socially conscious society. Key to this is building a stronger culture of giving. The proposals in this Bill are part of that drive. The scheme will particularly help small charities that rely on bucket collections, where it is impractical to get the paperwork required under Gift Aid. They will now be able to claim a Gift Aid-style payment on small donations without the need to collect donors’ details. The Gift Aid Small Donations Scheme will boost the income of charities, unlocking around £100m more funding for charities a year by 2015-16”

Charities must have a three-year record of successfully claiming Gift Aid and continue to make Gift Aid claims to qualify to reduce the risk of fraud. HMRC will publish draft guidance for the scheme for consultation in the autumn.

Please speak to Richard Monkcom, Partner and Head of Druces LLP’s Tax & Trust team for further information