How to claim top-up payments on small donations up to £20 if you’re a charity or community amateur sports club (CASC).
If you’re a charity or CASC you can claim top-up payments on small donations of £20 or less under the Gift Aid Small Donations Scheme (GASDS).
From 6 April 2017, you can claim on donations made using contactless technology, such as a contactless credit or debit card.
Before 6 April 2017, you could only claim top-up payments on small cash donations. Cash donations can be in coins or notes of any currency that have been collected and banked in the UK.
You do not need to know the identity of the donors or collect Gift Aid declarations.
Check if your charity or CASC can claim top-up payments
To claim top-up payments for donations collected from 6 April 2017, you must:
- have claimed Gift Aid in the same tax year as you want to claim a top-up payment
- not have incurred a penalty on a Gift Aid or GASDS claim in the current or previous tax year
To claim top-up payments for donations collected before 6 April 2017, you must:
- have claimed Gift Aid in the same tax year as you want to claim a GASDS top-up payment
- not have incurred a penalty on a Gift Aid or GASDS claim in this or the last tax year
- have existed for at least 2 complete tax years, unless your charity or CASC has recently merged with another
You cannot claim for:
- donations that come with a valid Gift Aid declaration
- membership fees
- a £20 portion of a larger gift
How GASDS claims are worked out
GASDS claims are worked out in the same way as Gift Aid.
If the basic rate of Income Tax is 20%, you can claim a GASDS top-up payment of £2,000 on £8,000 worth of small donations.
For example, if the donor gives £20, you can claim a GASDS top-up payment of £5.
Maximum top-up payments from 6 April 2016
The maximum amount of small donations top-up payments is the lower of:
- 10 times the amount you receive in Gift Aid donations - this is known as the matching rule
For example, if you receive £100 in Gift Aid donations, you can claim top-up payments on £1,000 worth of small donations under the matching rule. This works out as £250 in top-up payments.
To satisfy the matching rule, you must make claims on Gift Aid and small donations in the same tax year that you receive them.
If your charity has a community building you may be able to claim on more donations than the £8,000 limit.
Maximum top-up payments before 6 April 2016
From 6 April 2013 to 5 April 2016, the maximum amount of small donations top-up payments was £5,000 per tax year.
If your charity has a community building you may be able to claim on more donations than the £5,000 limit.
The community buildings rules affect how much your charity can claim under GASDS.
There’s no limit on the number of eligible community buildings that a charity can have.
The community building rules do not apply to CASCs.
Collections in community buildings from 6 April 2017
If you’re a charity with 2 or more community buildings, you can claim a maximum of £8,000 on either, small donations:
- collected anywhere in the UK
- for each community building collected in the same Local Authority area as the community building you’re claiming for
You can choose the option that benefits you the most.
If you’re a charity with less than 2 community buildings, it’s better to claim on small donations collected anywhere in the UK.
From 6 April 2017 you can claim top-up payments on small donations collected at any time, you do not have to collect them during a charitable activity. The community buildings rules will still apply.
You cannot charge a fee to enter the building (or the part of the building) where the charitable activities take place.
The activities must:
- include at least 10 people who’ll benefit from the charitable activity
- take place at least 6 times a year
- be open to members of the public
Collections in community buildings before 6 April 2017
You can claim top-up payments on donations collected in community buildings before 6 April 2017 for 2 tax years after the collection date.
This means you can claim top-up payments on donations collected during tax year:
- 2014 to 2015 until 5 April 2017
- 2015 to 2016 until 5 April 2018
- 2016 to 2017 until 5 April 2019
Before 6 April 2016, the claim limit for a tax year was £5,000 on donations collected:
- in each community building
- in the same Local Authority area
If your organisation is connected to another charity or CASC, other rules apply.
Connected charities and CASCs
If your charity or CASC is connected to another charity or CASC, you can pool small cash donations. The small donations amount that connected charities can share is:
- £8,000 from 6 April 2016
- £5,000 before 6 April 2016
From 6 April 2017, connected charities can only claim on small donations collected in the same Local Authority area as their community buildings.
If a group of connected charities would be better off sharing a single £8,000 allowance for donations collected anywhere in the UK they can choose to do so by making an election to HMRC.
You’re connected if you:
- have the same, or very similar, purposes and activities
- are controlled by the same or connected people
If one of your trustees is also a trustee for another charity or CASC, but the aims and activities of each organisation are largely different, then the 2 organisations are not considered connected.
If you’ve merged with another charity or CASC
From 6 April 2017, the rules about merging changed.
Mergers from 6 April 2017
You do not need to follow the merging process for claims relating to donations collected after 6 April 2017 because you do not need to have a Gift Aid history.
You can start claiming under GASDS straight away as long as you’re also claiming Gift Aid in the same tax year.
Mergers before 6 April 2017
If your merger began before 6 April 2017, you must follow the merging process if you want to continue their activities.
To benefit from the Gift Aid compliance history of the other organisation, you must write to HMRC no later than 90 days from the date you formed the new organisation.
You must wait 60 days from the date you formed the new organisation before you can make your first Gift Aid claim.
The address is:
Charities, Savings and International 2
HM Revenue and Customs
HMRC will issue a certificate showing that your charity has taken over the activities of an old charity or CASC, and the tax year that you’ll be eligible to make a claim for.
You need to keep records of small donations as evidence of your claim. Two people should ideally check and count the cash collected.
You should record:
- how much money was collected, including each denomination of coins and notes
- the date the money was collected
- that no individual donation was greater than £20
From 6 April 2017 if you’ve collected contactless donations you’ll need to keep the records produced by the contactless terminal.
You should keep records of any small donations you’ve collected for 6 years from the end of the tax year to which they relate.
Keeping records for community buildings
Some of the rules on keeping records of small donations collected during charitable events in community buildings have changed.
From 6 April 2017, if you choose to claim on amounts collected in the same Local Authority area as your community building.
You should record:
- the address and postcode of the community building
- the address (or addresses) where the donations were collected
- the date of each collection
- how and when that building met the charitable activity requirements
How to make a claim under GASDS
You’ll need to register for Charities Online to make a claim.
You must claim on small cash donations within 2 years from the end of the tax year that you collected them, and give the total amount of the small donations when making your claim.
You may need:
- a community buildings spreadsheet to show the amount of small donations collected in a community building in a tax year
- to install compatible software to help you fill in your claim online
If you receive an overpayment, include the incorrect amount that you received on your next claim. HMRC will deduct the amount from your next repayment.