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 GASDS is designed for small donations of up to £30, where it may not be practical to obtain a Gift Aid declaration from the donor. Charities can claim tax relief on small cash donations (including contactless payments) of up to £30 without a declaration, as long as the donations are made in the UK and the charity has claimed Gift Aid in the previous tax year. The amount of tax relief available under GASDS is currently 25% of the donation, which means that on a £10 cash donation, the charity can claim back an extra £2.50.

Currently, eligible charities can claim up to £2,000 in tax relief under GASDS each tax year. This means that the maximum amount of small donations that can be claimed under GASDS is £8,000. In order to access GASDS, there is a matching rule. The matching rule means there needs to be a 10% match in Gift Aid. So in order to access the full £2000, £200 in Gift Aid must also be claimed in that same tax year.

One 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.