Making every penny count for charities and sports clubs

Hillier Hopkins LLP

Chartered Accountants & Tax Advisers

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Many community sports clubs and charity organisations rely on small cash gifts to cover their running costs – but many are missing out on a funding top-up by not joining the Gift Aid Small Donations Scheme (GASD).

The government’s intention for GASD is to help groups make the most of small cash gifts of £20 or less received after April 6, 2013.

Charities and community amateur sports clubs (CASC) need to meet certain conditions to qualify for the scheme.

If they qualify, they can claim a top-up payment of up to £5,000 on small cash donations in any tax year – but this claim limit depends on certain circumstances.

The first step is testing eligibility for the scheme – so your group should tick these boxes:

  • Be a charitable trust or a charitable company recognised as a charity or CASC for tax
  • Been established for at least two complete tax years
  • Makes Gift Aid claims
  • Must have made successful Gift Aid claims in at least two out of the last four tax years, without a gap of two or more tax years between Gift Aid claims or since the last claim made
  • Should have no Gift Aid or GASD penalties against a claim made in the current or previous tax year

Next, GASD only tops up cash donations of £20 or less made in bank notes or coins. Gifts by cheque, credit card, text or bank transfer cannot be included.

GASD is worth a maximum of £1,250 a year on a small cash donation income of £5,000. The calculation is based on the basic rate of income tax.

For example, for the 2013-14 tax year, the formula is the basic tax rate x the GASD threshold, which is 20% of £5,000 = £1,250.

Another point to bear in mind is GASD is not Gift Aid, so donors do not get tax relief on the money they give.

For more information about GASD please click here