GASDS

parent nodes: community buildings | Connected Charities | small cash donations

GASDS

Note that Max My Gift does not apply any limits on the amounts entered and sent to HMRC.

See
http://www.hmrc.gov.uk/charities/gasds/basics.htm
http://www.hmrc.gov.uk/charities/gasds/working-out.htm
http://www.hmrc.gov.uk/charities/gasds/how-much.pdf

The Gift Aid Small Donations Scheme (GASDS) allows eligible charities and Community Amateur Sports Clubs (CASCs) to claim top-up payments from HM Revenue and Customs (HMRC) on small cash donations that they receive. The scheme applies to cash donations of £20 or less, received after 6 April 2013.

Charities and CASCs need to meet certain conditions so they can qualify for the scheme. If they do qualify, a charity or CASC could claim a top-up payment on up to £5,000 of small cash donations in a tax year - but this claim limit depends on certain circumstances.

How to work out if your charity qualifies

Your charity or CASC will be able to use the scheme if your organisation:

is a charitable trust or a charitable company, recognised by HMRC as a charity for tax purposes or a CASC
makes claims under Gift Aid
has existed for at least the last two complete tax years (6 April - 5 April)
has made a successful Gift Aid claim in at least two out of the last four tax years, without a gap of two or more tax years between those Gift Aid claims or since the last claim made
has not incurred a penalty on a Gift Aid or GASDS claim made in the current or previous tax year

Which donations you can claim for

You can only claim under GASDS for small cash donations. These are cash donations of £20 or less. The donation must be in bank notes or coins. Donations made by cheque, credit card, text or bank transfer do not count.

Working out how much you can claim

In general, charities and Community Amateur Sports Club (CASC) can claim on up to £5,000 of small cash donations per year. This guide explains how the top-up payments are calculated and the limits there are on how much you can claim.

How top-up payments are calculated

Eligible charities and CASCs can usually claim a top-up payment on up to £5,000 of small cash donations. The top-up payments are calculated in the same way as Gift Aid relief on the basis of the basic rate of income tax for the tax year.

While the basic rate of income tax is 20 per cent, the top-up payment under the Gift Aid Small Donations Scheme (GASDS) is calculated by dividing your small donations income by four.

If your charity’s eligible GASDS income is £2,000 and the basic rate of tax is 20 per cent, the top-up payment would be £2,000 ÷ 4 = £500

In order to claim under GASDS, you will also need to have made a Gift Aid claim for the same tax year that you are making the GASDS claims. This is called matching and is covered in the section below ‘Matching amounts claimed under Gift Aid and GASDS’.

Limits on the amounts that can be claimed

There is a maximum limit on the top-up payments a charity or CASC may claim. CASCs and most independent charities can usually claim under GASDS on a maximum of £5,000 of small cash donations received in a tax year.

There are special rules for some organisations if they are connected to other charities or CASCs, and for charities that make collections when running charitable activities in what are called 'community buildings'.

Matching amounts claimed under Gift Aid and GASDS

The amount that you can claim under the GASDS may also be restricted by the matching rule. You must match your claims under the GASDS with claims on donations received under Gift Aid in the same year. The matching rule means that the maximum amount on which you can claim the top-up payment under the GASDS is 10 times the amount on which your charity or CASC has claimed Gift Aid for the tax year.

It is important to keep using Gift Aid and to encourage donors to donate through Gift Aid whenever you can.

Here are some examples to show how the matching rule works:

Example one

Charity A has Gift Aid income of £200 and small cash donations income of £5,300 in the 2013-14 tax year, a total of £5,500.
The income on which Gift Aid is claimed is £200.

Under the matching rule, a GASDS top-up payment can be claimed on up to ten times the amount of Gift Aid income.

Gift Aid income of £200 × 10 = £2,000.

Maximum GASDS top-up payments can be claimed by the charity on small cash donations income of £2,000.

The charity can therefore claim on total donations of £2,200, made up of £200 under Gift Aid and £2,000 under the GASDS. In total, Charity A will receive a payment of £550, made up of £50 under Gift Aid and £500 under the GASDS.

Example two

Using the same charity in the example above, Charity A contacts some of its donors who agree to make Gift Aid declarations to cover donations already given in that tax year. As a result, the charity now has Gift Aid donations of £500 and small cash donations income of £5,000 in the 2013-14 tax year, still a total of £5,500.

The income on which Gift Aid is claimed is £500.

Under the matching rule, a GASDS top-up payment can be claimed on up to ten times the amount of Gift Aid income.

Gift Aid income of £500 × 10 = £5,000.

The charity can claim GASDS top-up payments on small cash donations income of £5,000.

The charity can therefore claim on donations of £5,500, made up of £500 under Gift Aid and £5,000 under the GASDS. So Charity A will receive payments of £1,375, made up of £125 under Gift Aid and £1,250 under the GASDS.

Example three

Charity B has Gift Aid income of £4,000 and small cash donations income of £6,000 in the 2013-14 tax year.

Under the matching rule, a GASDS top-up payment can be claimed on up to ten times the amount of Gift Aid income.
Gift Aid income of £4,000 × 10 = £40,000.

Because there is a general limit of £5,000 of small cash donations on which a top-up payment under the GASDS can be claimed, Charity B can claim GASDS top-up payments on a maximum of income of £5,000.

The charity can therefore claim on donations of £9,000, made up of £4,000 under Gift Aid and £5,000 under the GASDS. So Charity B will receive payments of £2,250, made up of £1,000 under Gift Aid and £1,250 under the GASDS.

Example four

CASC A has no Gift Aid income but small cash donations income of £2,500 in the 2013-14 tax year.

The income on which Gift Aid is claimed is nil.

Under the matching rule, a GASDS top-up payment can only be claimed if the amount of small cash donations claimed on are matched by donations under Gift Aid in the proportion of at least 10:1.

CASC A has no Gift Aid receipts to match the small cash donations received under the matching principle.

The CASC cannot therefore claim a top-up payment in that tax year.

Example five

CASC A in example four above knows who some of their donors are, and a number of the donors agree to make Gift Aid declarations for the year, covering £200 of the small cash donations that were made by them. Now CASC A has Gift Aid income of £200 and small cash donations income of £2,300.

The income on which Gift Aid is claimed is £200.

Under the matching rule, CASC A can claim GASDS top-up payments on up to ten times the amount of Gift Aid income.

Gift Aid income of £200 × 10 = £2,000.

CASC A can now claim a GASDS top-up payment on income of £2,000.

The CASC can therefore claim on donations of £2,200, made up of £200 under Gift Aid and £2,000 under the GASDS. So CASC A will receive payments of £550, made up of £50 under Gift Aid and £500 under the GASDS. CASC A cannot claim a top-up payment on the remaining small cash donations income of £300.

All of the examples show that if your charity or CASC gets Gift Aid declarations whenever it can, you'll be able to claim as much as possible under GASDS.

Using the matching rule

Gift Aid only counts towards the matching rule if it is claimed on donations received by the charity or CASC in the same tax year as the small cash donations were received. So if your charity or CASC claims Gift Aid on donations received in earlier years, you cannot use those donations to match GASDS claims for small cash donations received in subsequent tax years.

The GASDS is always worked out on a tax year basis. So for matching purposes you must also consider the Gift Aid donations received on a tax year basis, even if your accounting year is different from the tax year. You can use your current Gift Aid records that include the date you received donations to allocate Gift Aid receipts to the correct tax year.

The following example shows how to work out the Gift Aid for matching if the charity’s financial year is different from the tax year:

Example six

Charity C has Gift Aid income of £1,500 and small cash donations income of £6,000 in its accounts to 31 December 2013.

In its accounts to 31 December 2014, it has Gift Aid income of £3,000 and small cash donations income of £7,000.

The charity can make Gift Aid claims for its accounting year. However the period used for GASDS claims is tax years. So in this case, it is the 2013-14 tax year which runs from 6 April 2013 to 5 April 2014 that they will need to claim for.

The charity’s records show that the charity received £250 Gift Aid income between 6 April 2013 and 31 December 2013, and £4,000 small cash donations income in the same period.

They also show that the charity received £150 Gift Aid income between 1 January 2014 to 5 April 2014, and £2,000 small cash donations income in the same period.

The following table shows the payments that relate to the 2013-14 tax year.

	Total for the 2013 accounting year	Amount received 6 Apr - 31 Dec 2013	Total for the 2014 accounting year	Amount received 1 Jan - 5 Apr 2014	Total for tax year 6 April 2013-5 April 2014
Gift Aid donations	£1,500	£250	£3,000	£150	£400
GASDS donations	£6,000	£4,000	£7,000	£2,000	£6,000

For the tax year 2013-14, the charity therefore received £250 + £150 = £400 in Gift Aid income and £4,000 + £2,000 = £6,000 of small cash donations.

Under the matching principle, the charity can claim a maximum GASDS top-up payment on income of £400 x 10 = £4,000 for the 2013-14 tax year. This is because the top-up payment is restricted by the level of Gift Aid income received in the 2013-14 tax year of £400.

So for 2013-14 Charity C claims:

£100 Gift Aid on Gift Aid donations of £400
£1,000 top-up payment on GASDS small cash donations income of £4,000