Claiming a top-up payment on small charitable donations
Guidance for charities and CASCs on claiming a top-up payment on cash donations of up to £20.
The Gift Aid Small Donations Scheme (GASDS) allows eligible charities and community amateur sports clubs (CASCs) to claim ‘top-up’ payments on cash donations of £20 or less.
Cash donations must be in bank notes or coins that have been collected and banked in the UK after 6 April 2013. Donations can be in any foreign currency.
You don’t need to know the identity of the donors or collect Gift Aid declarations, which makes it easier to claim on donations like street collections.
Work out if your charity or CASC is eligible
To be able to claim under GASDS, your charity or CASC must:
- have existed for at least 2 complete tax years, unless your charity or CASC has recently merged with another
- have claimed Gift Aid in the same tax year as you want to claim a top-up payment (you can claim tax on Gift Aid donations and a top-up payment on small donations at the same time)
- have made a Gift Aid claim in at least 2 of the last 4 tax years, with no more than 2 years’ gap between claims
- not have incurred a penalty on a Gift Aid or GASDS claim in this or the last tax year
You can’t claim on:
- donations that come with a valid Gift Aid declaration
- membership fees
- a £20 portion of a larger gift
There are other rules that affect the amount you can claim on, explained on this page.
How GASDS claims are calculated
GASDS is worked out in the same way that Gift Aid is calculated. This means that, where the basic rate of income tax is 20%, small donation income of for example £8,000 will entitle you to a top-up payment of £2,000. The limit on small donations income was £5,000 per tax year between 6 April 2013 and 5 April 2016.
The maximum donation that you can claim a top-up payment on is the lower amount of:
- 10 times the amount of donations you’ve claimed Gift Aid on (‘the matching rule’)
- small donations of up to £8,000 received after 6 April 2016
To satisfy the matching rule, you must make claims on Gift Aid and small donations in the same tax year that you received them. The tax year is 6 April to 5 April, even if your own accounting year is different.
If you received £100 in Gift Aid donations, you could claim a top-up payment on £1,000 worth of small donations.
Collections in community buildings
You can claim a top-up payment on small donations collected during charitable activities held in a community building, for example a church, a cathedral, a town hall, a mosque, a synagogue or a village hall.
Charitable activities must be held in community buildings at least 6 times in a single tax year (6 April to 5 April) to qualify.
CASCs can’t claim on donations collected during charitable activities that take place in community buildings.
Charitable activity held in a community building must:
- include at least 10 people who’ll benefit from the charitable activity
- be open to members of the public
You can’t charge a fee to enter the building, or the part of the building, in which the activity takes place. Activities carried out primarily for the purposes of fundraising, such as jumble sales, concerts and dinners don’t count as charitable activities and aren’t therefore eligible.
There is no limit on the number of eligible community buildings that a charity carries out its charitable activities in. From 6 April 2016 if your charity has 2 community buildings it could claim on up to £24,000 in one tax year, made up of:
- a maximum of £8,000 of small cash donations collected in each of the 2 community buildings
- a maximum of £8,000 of small cash donations collected elsewhere for example a street collection
In one tax year, an animal welfare charity collected £4,000 in collection boxes around the town, received £2,500 of small donations during its monthly charitable activities held in a village hall and £1,200 of small donations collected during charitable activities held every other month in a local church hall. The charity could claim top-up payments on all three collections.
The limit on small donations income was £5,000 on cash donations collected in each community building and £5,000 collected elsewhere per tax year between 6 April 2013 and 5 April 2016.
Be aware that there are special rules around keeping records about small donations raised in a community building.
If your organisation is connected to another charity, other rules apply.
The definition of ‘community building’
A community building is a building that the public, or a section of the public have access to at some or all times for example a village hall, town hall or a place of worship.
Any part of a building that is used mainly for the sale of goods or for living in is not a community building. However, if you have exclusive use of part of a building to carry out your charitable activity for example a meeting room in a hotel, then the meeting room can be treated as a community building.
Claiming GASDS if you’re connected to another charity or CASC
If your charity or CASC is connected to another charity or CASC, you can pool small cash donations. The small donations amount up to a maximum of £8,000 received after 6 April 2016 is shared equally between you.
You’re connected if you:
- have the same or largely the same 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, the 2 organisations are not considered connected.
Claiming GASDS if you’ve merged with another charity or CASC
If you’ve recently merged with another organisation to continue the activities of the previous charity or CASC, you can apply to HM Revenue & Customs (HMRC) to benefit from the Gift Aid compliance history of the other organisation.
Newly-formed charities or CASCs can claim a top-up payment straight away.
To apply to take on the Gift Aid compliance history of a predecessor charity or CASC you must apply in writing either:
- within 90 days from the date you formed the new organisation
- 60 days before the new charity or CASC makes its first Gift Aid claim
HMRC will issue a certificate to show that your charity has taken over the activities of an old charity or CASC and the tax year that you will be eligible to make a claim for.
You must keep records of small donations as evidence of your claim. Two people should ideally check and count the cash collected. You need to 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
If you collected small donations in a community building during a charitable activity, you must record:
- the address and postcode of the community building
- the type of charitable activity
- an estimated number of beneficiaries who attended each charitable activity
Keep records of small donations you’ve received for 6 years from the end of the tax year to which they relate.
How 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.
To claim online, you’ll need to sign up to use HMRC’s Online Services and enrol for Charities Online.
Use the Charities Online form to make a GASDS claim. You must give the total amount of the small donations you’re claiming on up to a maximum of £8,000 received after 6 April 2016 or £5,000 on donations received in previous tax years and make a declaration that the information is correct.
You may need:
- a community buildings spreadsheet to show the amount of small donations collected in a community building in a tax year
- compatible software
To apply by post, you’ll need to ask for a ChR1 form from the charities and CASCs helpline.
If you make a mistake that means you receive more than you are entitled to, adjust your next claim by including the incorrect amount that you received on the form. This amount will then be deducted from your next repayment.
If you haven’t been repaid the right amount or you submitted an incorrect claim, contact the charities and CASCs helpline.
Published: 26 November 2014
Updated: 7 March 2016
- Guide updated with the new £8,000 limit effective from 6 April 2016.
- Information on eligibility criteria has been updated.
- Updates made to Work out if your charity or CASC is eligible section.
- First published.