Gift Aid Small Donations Scheme (GASDS) – submission of separate donations can be permissible

*Update*: At the HMRC Charity Tax Forum meeting in January 2021, CTG asked whether this concession about GASDS (allowing GASDS in cases where regular donors, particularly churchgoers, to save up the cash they would have put in the collection each week and give it to the treasurer in one large cash amount) was restricted to COVID times. HMRC confirmed that this was not unique to the pandemic and it was not a concession; provided the treasurer was satisfied that the pile of cash received was multiple small donations which happened to be in one envelope, then he/she could claim GASDS subject to the normal rules. Read para 38-39 of the minutes for full details. This could be particularly helpful when regular donors are on holiday or required to miss events/church services for an extended period due to lockdowns or illness.

As a result of the COVID-19 crisis, many small charities and churches are facing severe financial pressures as traditional income streams from lettings and face-to-face fundraising have dried up. Concerns have been raised about the operation of GASDS during the coronavirus crisis, given that many eligible cash donations could be lost. Donors that would ordinarily make small donations each week are asking if they can keep aside the individual donations that they would normally give and make them separately once the crisis is over, above the standard £30 limit. Receiving cash donations by post does not provide a solution as charities (often run by volunteer treasurers) are not able to bank any cash donations received during the lockdown due to restrictions on gatherings and essential travel.

The Charity Tax Group (CTG), supported by the Churches’ Legislation Advisory Service (CLAS) and others, urged HMRC to introduce some temporary flexibility in the operation of the GASDS scheme by accepting multiple cash donations of £30 or under that have been saved up during the crisis. The submission noted that ultimately the cap on eligible donations would remain at £8,000, so there would be no additional cost to the Exchequer.

HMRC officials have now responded to CTG:

“In respect of GASDS, guidance on the eligibility for donations for inclusion in this scheme is clear in stating that claims can only be made on cash donations of £30 or less; 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”.

This is a welcome and pragmatic clarification from HMRC officials, recognising the practical difficulties raised by COVID-19.

If, for example, a church member puts £200 cash in an envelope and marks it as 10 weeks of £20 weekly donations for the occasions where they have not been able to make a regular cash offering,  it appears HMRC would be happy for the church to regard them as eligible donations under GASDS. Alternatively 10 separate envelopes with <£30 could be included where these are clearly separate donations. This will help small charities and churches where they have an understanding of regular gifts by donors. Where a donor turns up to one event a year (e.g. a Christmas service) and just gives a single large donation, this is less likely to be appropriate. A sensible pragmatic approach is required.

Thinking about practical next steps, charities and churches could also help to make it easier to distinguish such gifts by providing separate collecting plates/donation receptacles reserved for saved-up donations when the lockdown restrictions are eased.

If you have any comments or queries on this development please contact

HMRC Guidance on the Gift Aid Small Donations Scheme can be read here.