Contactless payments to be included in Gift Aid donation scheme

The government has confirmed it will bring forward legislation to include contactless payments within GASDS (Gift Aid Small Donations Scheme).

A consultation setting out potential reform options was published in April – and subsequently received 46 responses from charities, representative bodies and others. HMRC has published the responses to its consultation on simplifying the GASDS.

Introduced in 2013, the scheme was designed to make it easier for charities to claim gift aid top-up payments for small cash donations. Far less has been raised for charities than was originally intended, with estimates suggesting it has failed to get anywhere near the £135m the government had expected the scheme to be raising by 2015.


Contactless payment

In the summary of responses, the government confirmed that it will bring forward legislation to include contactless payments within GASDS. HMRC stated: “Although currently very few charities use contactless technology, the available evidence suggests that take up is likely to increase in the future. The government is satisfied that contactless donations could be included within GASDS without imposing significant extra burdens on charities who choose to use the technology. The government will therefore bring forward legislation to include contactless payments within GASDS.”

It did, however, add that GASDS should “only be available for small donations in which obtaining a full gift aid declaration is not practical or feasible” and therefore other donation methods should not be brought within scope of the scheme.

HMRC also announced that the two-year rule, which requires charities to have been registered for at least two years before it can access GASDS, will be removed. It also set out proposals to allow an intermediary between a donor and a charity, such as an online giving platform, to ask for authorisation to complete Gift Aid declarations on a donor’s behalf.

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