The government announced last week that it has introduced a bill to Parliament which will bring the Gift Aid Small Donations Scheme into law.
This new scheme is pretty simple, at heart, and also a pretty good idea: it will allow charities to claim something equivalent to Gift Aid on £5,000 a year in cash donations, even if they haven’t got the right forms.
There is plenty of red tape. You can’t claim if you’ve broken HM Revenue & Customs rules recently; you can only claim if you’ve claimed Gift Aid for three of the past seven years; and you can only claim twice as much under GASDS as you did under Gift Aid.
This is a bit more bureaucratic than charities hoped, and as a result, not quite as many will take it up as we once thought. But it seems churlish to complain too much, since it’s extra cash at a time it’s badly needed.
So far, so good. However the government’s claims about its impact – specifically that it will bring in £105m a year for the sector – seem a bit optimistic.
Since the maximum any charity can claim is £1,250, 84,000 charities would have to take up their full allocation before they could hit this target.
This will require a fair bit of behaviour change. According to NCVO figures only about 88,000 organisations get any sort of donation from an individual. HMRC figures show that 64,000 of those claim Gift Aid in any given year.
On top of this, some charities that operate “community buildings” are actually able to put in more than one claim. In particular, places of worship are able to claim individually, even if they’re all part of the same charity.
HMRC’s calculation is based on an assumption that around 90 per cent of the charities currently claiming Gift Aid will take up their full allocation under GASDS, and that this scheme will also lead to a 50 per cent increase in the number of organisations claiming Gift Aid.
It would be good to think that the charity sector is this organised, but I’m sceptical. At a hyper-local level, on the boards of PTAs and churches and village halls, I’m not sure there’s going to be that much awareness of this scheme. I can’t see it driving large-scale behaviour change among these good folk.
In short, if the figure actually claimed is much more half the £100m mooted today, I’ll be surprised.