From next year, the Government will introduce a variety of measures to reduce administrative and financial burdens on charities, including increasing the individual limit under the Gift Aid Small Donations Scheme.
The proposals, set out in the Chancellor’s Autumn Budget, also include increasing the upper limit for trading that charities can carry out without incurring tax, as well as removing administrative duties from charity shops using the Retail Gift Aid Scheme.
We have briefly summarised the measures below.
Gift Aid Small Donations Scheme
The Government will increase the individual donation limit under the Gift Aid Small Donations Scheme to £30 (aligned with the maximum amount that can be paid on contactless card payments) from April 2019, which applies to small collections where it is impractical to obtain a Gift Aid declaration. The measure is expected to generate around £5 million in tax relief each year.
Charity upper trading limit
From April 2019, the Government will increase the upper limit for trading that charities can carry out without incurring a tax liability from £5,000 to £8,000 where turnover is under £20,000, and from £50,000 to £80,000 where turnover exceeds £200,000.
Retail Gift Aid Scheme
In an effort to remove the administrative burden from charities, the Government will allow charity shops using the Retail Gift Aid Scheme to send letters to donors every three years when their goods raise less than £20 a year, rather than every tax year. This will take effect from April 2019.