The Small Donations and Childcare Payments Bill 2016/17: What this means for you

Child Care

The Gift Aid Small Donations Scheme (GASDS) was originally set up to help charities and organisations claim top-up payments on cash donations. However, the scheme has proved too complicated with many charities either unable or unwilling to claim. In response, the government is ready to tackle the major issues of the scheme with a brand new solution: The Small Donations and Childcare Payments Bill 2016.

On 6 September 2016, HM Revenue and Customs’ (HMRC’s) Charities Outreach Team provided feedback on the main queries and most common errors made with a claim through the GASDS, since it came into fruition in April 2016. From HMRC’s feedback, seeking advice on the GASDS and seeking advice on ‘eligible donations’ were of the most common queries made by charities.  Furthermore, of the most common errors made during a claim, ‘claiming too much under the GASDS’ and being confused about what could be claimed under the GASDS were the most popular.
As a result, on 14 September 2016, the government held its first hearing on the Small Charities Donations and Childcare Payments Bill. The Bill was established to provide clearer adjustments and increased flexibility to the current GASDS. In 2013, the GASDS was introduced as a ‘top-up payment’ on the current Gift Aid relief, allowing charities to claim 25% on cash donations of £20 or less. According to Civil Society, the latest figures suggested that the GASDS only raised £21million in 2014/2015, which is £134million down from what the government had anticipated that the scheme would raise. With this in mind, the reform to the GASDS intends to be more simplified and provide increased flexibility by


  • Removing several eligibility criterions so more smaller charities can benefit – This includes the ‘two year eligibility rule’ and ‘two in four rule’
  • Restructuring the ‘community buildings’ clause so more charities can claim top up payments
  • Clarifying the rules on donations so that more charities can qualify
  • Introducing contactless pay to reflect technological changes to donations

“The Small Charitable Donations Bill could be good news for charities, particularly for smaller organisations which have often struggled to unlock the benefits of Gift Aid. This provides a real opportunity to simplify the scheme and make it fit for the 21st century,” John Low, chief executive of the Charities Aid Foundation. The second reading of the Bill is expected on 11 October 2016. To read further information on this, please go to