Small charity donations to qualify for top-up payments
Charities will be able to claim top-up payments on up to £5,000 of small donations without needing Gift Aid declarations, under changes announced in The Queen’s Speech.
From April 2012, the Gift Aid Small Donations Scheme will allow charities to claim the Gift Aid-style top-up payments from HM Revenue and Customs (HMRC) without needing to get a Gift Aid declaration from donors.
The top-up payment will be 25p for every pound collected in the United
Kingdom, on up to £5,000 of donations, where the individual donations
are £20 or less.
The final policy is under consultation until May 25th. You can add your views here.
following is our response to the proposals:
Matters supports the fuller response being made by the Charity Finance Group,
but wishes to highlight the following concerns:
process proposed seems highly complex and one that many small organisations may
be put-off from using, potentially making the initiative the exclusive preserve
of larger charities
our view, the restriction on eligible organisations (ie those with a good track
record of claiming gift aid) unfairly excludes new organisations or those that
are considering gift aid for the first time
seems to be a strong focus on preventing abuse, the tone of which appears to
conflict with the Government’s stated objective of encouraging the use of gift
are not clear about the intention of paragraph 5.10. Community Matters members
are Community Associations, which are local umbrella charities and may have a
number of community groups or sections operating under their name and charity
number. Donations are likely to be directed at the different community groups
and to prevent these groups breaking apart, Community Matters would urge that each
group or section of the community association should have its own allocation of
£5,000, (or £10,000 if operating within a community building).
welcome the additional relief proposed for donations collected in community
buildings as this may help to offset the loss of income for community premises
across the country. In particular:
think that the definition of a community building in paragraph 5.18 may prove
too limited. The Government’s asset transfer agenda and Community Right to Bid
will enable charities to take over everything from toilet blocks to beaches and
piers and these may be the only community spaces available in some areas,
particularly those where the local authority has closed its own community
buildings. We also think that eligibility should include Council owned premises
and privately owned premises where there has been a tradition of community use
of those spaces
would urge that the proposed additional relief should apply to all relevant
community buildings, including those where the proportion of charitable
activity is lower than the 95% qualifying limit for vat relief on construction,
for example, (accepting that donations for non-charitable purposes would not be
eligible for top up payment). The Government’s encouragement to communities/community
buildings to take on the delivery of public services and to develop social
enterprises in order to become sustainable means that many community buildings
now operate a mix of charitable and non-charitable activities.
would urge that the phrase ‘in the community building’ (paragraph 5.14), mean
the whole space (including the grounds or external space) occupied by the
limitation of 10 group members excluding trustees and staff may unfairly
exclude the very smallest community buildings/organisations, particular those
in small rural communities