Gift Aid and the Gift Aid Small Donations Scheme (GASDS) are both UK tax relief schemes that allow charities to claim back tax on donations from UK taxpayers. However, there are some key differences between the two schemes.
Gift Aid
Gift Aid applies to eligible donations made by individuals who have either; completed a Gift Aid declaration or have authorised an intermediary to create Gift Aid declarations on their behalf. This confirms that they are a UK taxpayer and gives the charity permission to claim tax relief. The charity can then claim back the basic rate tax (currently 20%) on the donation from HM Revenue and Customs (HMRC). For example, on a £10 donation, the charity can claim back an extra £2.50, making the total value of the donation £12.50.
GASDS
The Gift Aid Small Donations Scheme (GASDS) is intended for small donations where collecting a declaration is impractical, such as cash in collection buckets or contactless donations of £30 or less. Charities can claim a top-up payment equivalent to Gift Aid (25% of the donation) without a declaration, provided:
The donation is made in the UK.
Your charity or Community Amateur Sports Club (CASC) must have made a successful Gift Aid claim in the same tax year as the GASDS claim.
You must not have incurred a penalty on a Gift Aid or GASDS claim in the current or previous tax year.
Donations are within the scheme’s limits.
The maximum claimable amount under GASDS is £2,000 per tax year, which corresponds to £8,000 in eligible small donations. To claim this, charities must also meet the 10% matching requirement: So in order to access the full £2000, £200 in Gift Aid must also be claimed in that same tax year.
Key difference
One key difference between the two schemes is that Gift Aid requires a Gift Aid declaration from the donor, whereas the GASDS does not. However, the amount of tax relief available under the GASDS is significantly lower than under Gift Aid, and there are additional rules and eligibility criteria that charities must meet to use the scheme.
Both schemes can be a valuable source of income for charities, but it’s important to follow the rules and keep accurate records of donations to ensure that you are eligible to claim the tax relief. Charities must ensure donations that are claimed under Gift Aid are not double claimed under GASDS.
Check full eligibility and guidance for The Gift Aid Small Donations Scheme here.
