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Gift Aid updates April 2019 – What does this mean for charities?

The new tax year has brought several positive changes to Gift Aid which will increase opportunities for charities to claim Gift Aid and reduce their administration burden. See the three most significant changes below. 

Gift Aid Small Donations Scheme (GASDS)

With effect from 6 April 2019, the maximum donation which a charity may claim a Gift Aid top-up payment under the GASDS is to increase from £20 to £30.

This will hopefully lead to the GASDS being more widely used, as compared with regular Gift Aid, the Scheme is still largely unused.  The change will particularly make an impact among charities and donors that make donations to churches in collection boxes, in the local community, or make contactless donations; the increased limit is now aligned with that of the maximum contactless payments in an effort to take advantage of this easy form of payment

Gift Aid Donor Benefits

The current three tier thresholds for gift aid donor benefits is to be replaced with two thresholds. The changes will apply to gifts made by individuals and payments made by companies to charities after 6 April 2019.

Under the new system, the benefit threshold  for the first £100 will remain at 25% of the amount of the donation. For larger donations, an additional benefit of 5% of the donation that exceeds £100 can be offered to donors, with the total value of the benefit a donor can receive remaining at £2,500.

The value of benefits that charities can offer donors will be at least equal to the current thresholds, being larger in some cases. This is also good news for membership charities in particular which may be able to offer larger benefit packages to their donors.

Retail Gift Aid

A non-mandatory £20 de minimis limit for letters to donors for charities operating methods A or B  of the Retail Gift Aid scheme is being introduced. From April 2019, if a charity adopts the new limit, a letter need to be issued when net sales reach £20 , or every three years, whichever is earlier.

The changes should reduce the admin burden on charities that was previously required. The Charity Retail Association has estimated that one of its largest members, a national chain, would save nearly £110,000 a year in postage costs. HMRC guidance is to be published in due course.

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