Good news for charity donations

06/01/2016

The Small Charitable Donations Act (Amendment) Order 2015 increases the maximum amount of small donations on which a charity may claim a top-up payment (referred to as the specified amount ) for a tax year. The specified amount, which is similar to Gift Aid, will increase from £5,000 to £8,000 with effect from 6 April 2016.

Charities and community amateur sports clubs are entitled to claim top-up payments from HMRC in respect of small donations if:

1. the charity is an eligible charity for a tax year;
2. the charity has made a successful gift aid exemption claim in respect of gifts made to it in the tax year;
3. the small donations are made to the charity in the tax year; and
4. the charity makes a claim in respect of small donations made to it in the tax year.

The amount of the top-up payment is calculated using a standard formula. The charity is not entitled to top-up payments in respect of small donations made to it in a tax year in excess of the maximum donations limit for the charity for that tax year.

The maximum donations limit is:

a) an amount equal to 10 times the gift aid donations amount for the charity for the tax year, or
b) if less, the specified amount for the charity for the tax year.

For further advice on charitable donations and top-up payments, please contact Elizabeth Irvine