The Gift Aid Small Donations Scheme (GASDS) aims to enable charities to claim a Gift Aid style repayment on small cash donations of up to and including £30 where it is often difficult to obtain a Gift Aid declaration. For churches, this would include loose cash in the offering plate and donations not in Gift Aid envelopes.
It is important to note that GASDS is not a tax relief like Gift Aid but a government spending measure. GASDS is a separate scheme but is claimed alongside Gift Aid in a similar way.
Churches can claim top-up payments on up to £8,000 of small donations they receive each tax year. This means a church can reclaim £2,000 each year (i.e. 25% of £8,000).
Covid-19 situation and GASDS
There has been some helpful clarification from HMRC on how to deal with those folk who aren’t Gift Aid donors and are storing up their regular giving envelopes for when they next return to church.
For example, if a regular cash donor put £200 cash in an envelope and marked it as 10 weeks of £20 weekly donations for the occasions on which that person had been unable to make a regular cash offering in church.
When this was raised with HMRC, they responded:
‘In respect of [the Scheme], guidance on the eligibility for donations for inclusion … is clear in stating that claims can only be made on cash donations of £30 or fess; and contactless card donations of £30 or less collected on or after 6 April 2019. The decision over what constitutes an eligible donation is one for the church/charity to make for themselves, rather than for HMRC, but the conditions for something to be considered a “small donation” are clearly set out in legislation. Where it is the case, for example, of separate donations being given in a single envelope, then if the church/charity official is happy these are clearly separate “small donations” (and clearly stated as such) then they will be eligible for GASDS, as is the case where separate envelopes are used’.
It is important to ensure your records are really clear to ensure you could satisfy these requirements.
How does GASDS work?
To take advantage of the GASDS scheme, vestry records should clearly show which donations are eligible for GASDS.
You must make a cash analysis of your loose offerings and small donations. The simple vestry sheet in the downloads box makes this straightforward.
- You must make Gift Aid claims on the donations received in the same tax year to make a GASDS claim for that tax year (GASDS will be claimed for tax years - whereas our Gift Aid claims are made for financial years).
- Total Gift Aid donations must be at least 10% of the amount of small donations on which top-up payments are claimed.
- The Scheme only applies to cash donations and contactless payments, not cheques or Standing Orders.
A word of caution
GASDS has proved complex, with rules that allow charities with similar activities but very different legal structures (eg C of E and RC churches) to be able to take advantage of the scheme and rules to prevent abuse. How the Church of England churches claim GASDS had been subject to change. - please see 'What donations can we claim for?' below.
What do we need to do?
GASDS is a separate scheme - it does not mean the end of Gift Aid.
If you want to benefit from the scheme, it is important to ensure that:
- Gift Aid records are regularly maintained with a valid audit trail
- Gift Aid claims are made regularly (at least annually)
- Your vestry procedure correctly records small donations. See the downloadable templates below.
- You are clear about which small donations are eligible. See the next section for guidance.
What donations can we claim for?
There are two options, depending on whether the parish is a single church or mult-church parish:
1 - Single church parishes should claim on the main top-up element of the scheme, up to £8000 per parish. You can include small cash donations:
- in loose offerings
- regular non Gift Aid envelopes
- in wall safes
- received outside the building e.g. home communions
Exclude donations for things like tea/coffee, votive candles, flower festival, ie anything with a 'benefit'. See the national Guide to GASDS for parishes with single church for more details.
2 - Multi-church parishes should continue to claim on the Community Buildings element, up to £8000 for each separate church building. You can include small cash donations:
- in loose offerings
- regular non Gift Aid envelopes
- in wall safes
- received outside the building but made within the Local Authority area of the building, e.g. home communions
The same exclusions as above also apply.
For a building to be eligible to count as a "community building", charitable activities (services) should take place with at least 10 people (beneficiaries) present on at least 6 occasions in the year.
See the national Guide to GASDS for parishes with multiple churches for more details.
More guidance:
See the checklist below to compare what donations you can claim depending on whether you claim on the Top-Up or Community Buildings element of the scheme.
The Resources team offer regular briefing sessions on the GASDS scheme.
Useful links and downloads
Presentation slides from a briefing session
Top-Up or Community Building? - GASDS checklist
GASDS tracker sheets
National CofE guidance
GASDS web page
Guide to GASDS for parishes with single church
Guide to GASDS for parishes with multiple churches
HMRC guidance
HMRC basic GASDS
HMRC detailed GASDS
Small Charitable Donations Bill: GASDS Bill