Overview

This bill aims to provide financial top-up payments to eligible charities for small cash donations received. The top-up is designed to boost small donations and is calculated as a percentage of the basic rate of income tax on the total amount of small donations received.

Description

The Small Charitable Donations Bill introduces a "top-up payment" scheme for eligible charities. To qualify, charities must meet several conditions:

• Eligibility: Successful Gift Aid exemption claims in at least two of the previous four tax years and a completed start-up period.
• Small Donations: Cash donations of £20 or less, collected in the UK, deposited in a UK bank account, ineligible for Gift Aid, not deductible from income tax, not subject to repayment conditions, and with no or negligible associated benefits.
• Connected Charities: The top-up scheme applies to groups of connected charities, with the maximum amount adjusted based on the number of charities in the group.
• Charities in Community Buildings: Charities operating in community buildings have their specified amounts calculated based on donations received in the building from group members.
• Top-up Calculation: The top-up payment equals a percentage (basic rate of income tax) of the total small donations, up to a maximum limit (10 times the Gift Aid amount or £5,000, whichever is less).
• Mergers: Specific provisions allow new charities formed from mergers to inherit the eligibility status of the old charities, under certain conditions.
• Administration: HMRC manages the top-up payments, including claims, repayments, and enforcement.
• Taxation: Top-up payments are not considered taxable income.

Government Spending

The bill will increase government spending to fund the top-up payments to charities. The exact amount will depend on the number of eligible charities and the total amount of qualifying small donations. No specific figures are provided in the bill text.

Groups Affected

• Eligible Charities: Will receive additional funding through top-up payments, potentially increasing their income and capacity.
• Individual Donors: Small cash donations to eligible charities will have a larger impact, increasing their overall value.
• HMRC: Responsible for administering the scheme, including processing claims, managing payments, and enforcing repayments of overpayments.
• Connected Charities: Will have their top-up payments adjusted based on their connections.
• Charities operating in Community Buildings: These charities will have specified amounts adjusted based on donations from group members in community buildings.

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