The Small Charitable Donations Bill is another important sign of this government’s commitment to fostering a culture of giving, says Chloe Smith.
As the minister responsible for charity tax, I want to encourage all kinds of giving, from loose change in buckets and tins to the very largest philanthropic donations.
The gift aid scheme is a vital part of the government’s support for giving. It’s perhaps the most vivid example of the tax system supporting a bigger society – providing over a billion pounds a year in extra funding, straight to charities.
For larger donations, the government has already increased the gift aid benefit limits, from £500 to £2,500, which means that bigger donors have even more incentive to be generous to a special charity or museum. And yesterday I introduced legislation making an important change to help the charities – large and small - which rattle tins or pass collection boxes at special events or in high streets up and down the land, to get more out of gift aid. I recognise that often it isn’t practical for charities to stop donors and ask them to fill out paperwork for the donations they have made passing by. So from next April, they won’t have to. They’ll be able to claim gift aid-style top-up payments on donations of £20 or less without getting the donors’ details. In total, charities and eligible community groups will be able to claim on up to £5,000 a year under the scheme. This is expected to raise an extra £100m annually in by 2016.
Many of you in the fundraising sector gave us your views during consultation. We listened, and changed our proposals by halving the requirement to match small donations with gift aid donations. We’ve also refined the plans so that charities which are connected through administrative functions or trustees but have completely different objectives can benefit independent of one another. And where charities are more closely connected, there’ll be more flexibility around how they use their allocation. I hope the sector will see the publication of this Bill as another important sign of this government’s commitment to fostering a culture of giving.
It is probably an understatement to say that in the wake of the Budget, the Treasury was not flavour of the month in the fundraising world. I heard people’s views loud and clear - indeed, they were even set to music - when I went to the Charity Tax Group’s conference in April. The crucial point is that we listened, and concluded that the uncertainty caused by the proposed cap created a considerable risk to the charitable sector, and so we decided not to include charitable reliefs. My priority is to continue listening and engaging with you in delivering on the government’s ambitions, while making it easier for people, rich or poor, to give any amount.
Chloe Smith is Economic Secretary to Treasury