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Gift Aid Small Donations Scheme for academies and MATs – worth £2,000 per school per year?

The Gift Aid Small Donations Scheme (GASDS), was introduced to simplify Gift Aid for small cash donations, but is still widely under-used. Academies and MATs that collect cash donations may be eligible for GASDS and could benefit from community buildings claim limits.

GASDS is a simple way to claim Gift Aid-style top-up payments on small cash donations or contactless card donations (£30 or less) without any need to collect personal details or a declaration from the donor. For an academy trust, the GASDS could be useful for cash collections made at, for example, PTU meetings, parents’ evenings and school fairs etc.

As with regular Gift Aid, HM Revenue and Customs (HMRC) will pay out 25% of the total value of the donations received. However, with no requirement to collect declarations, in basic principle GASDS is as simple as collecting and recording the cash, and then making the claim.

For single-school academy trusts, GASDS can be claimed on up to £8,000 of donations per tax year, which equates to a repayment of £2,000. MATs may also choose, instead of claiming a single £8,000 limit for the whole trust, to claim up to £8,000 of donations for each individual school. For example, a MAT made up of 20 schools could, in theory, claim £40,000 in a tax year if at least £8,000 of small cash donations are collected by each of the schools.

However, the individual school in a MAT must qualify as a ‘community building’ in order to be eligible to have its own £8,000 limit. Unfortunately the normal teaching activities of the school will not qualify it for this purpose - the school needs to carry out a charitable activity that is open to the general public (or a section of the public) with no charge for access, at least 6 times in the tax year and with at least 10 people in attendance.

Examples of activities that could qualify a school as a community building include: a breakfast club for local elderly residents, an activity club open to all children in the community, a free music concert, or a church group meeting.

Note that as long as the school building qualifies as a community building, cash donations under GASDS can be collected anywhere in the school building or in the same council area – donations do not have to be collected as part of the specific qualifying community activity (apart from donations collected before 6 April 2017, for which different rules apply).

Please note that GASDS can only be claimed by an academy or MAT if it has made a claim under regular Gift Aid in the same tax year and the Gift Aid claim is worth at least 10% of the value of the GASDS claim. For example, if an academy receives a donation of £500 under regular Gift Aid it can claim up to £5,000 under GASDS in the same tax year.

The time limit for a claim under GASDS is two years following the end of the tax year (5 April) in which the donations were collected.

 

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