Reminder- Changes to Gift Aid as of April 2019

With the first quarter of the new tax year just passed, here is a reminder of the tax changes, made back in April 2019, that affected charities.

Small donations Scheme

The maximum donation which a charity may claim a Gift Aid top-up payment under the Gift Aid Small Donations Scheme increased from £20 to £30. This is for cash or contactless payments received from donors by way of street collections or collection pots, etc.

The changes will predominantly impact charities and donors that make donations in collection boxes i.e. churches or local community initiatives or make contactless donations. With the new limit now aligning with the maximum contactless payment this will hopefully encourage this quick and easy form of payment. As a result of these changes the scheme will hopefully become more widely used.

Donor Benefits

The old three tier thresholds for Gift Aid donor benefits was replaced with two thresholds. This change applied to gifts made by individuals and payments made by companies to charities after 6 April 2019.

Under the new system, the benefit threshold for the first £100 will remain at 25% of the amount of the donation. For larger donations, an additional benefit of 5% of the donation that exceeds £100 can be offered to donors, with the total value of the benefit a donor can receive remaining at £2,500.

The value of benefits that charities can offer donors will be at least equal to the current thresholds, being larger in some cases. This is also good news for membership charities in particular, which may be able to offer larger benefit packages to their donors.

These positive changes will not only increase the opportunity for charities to claim gift aid but reduce the admin load as well.

For any advice on how these changes impact your charity, please get in touch.