Small Charitable Donations and Childcare Payments Bill

Written evidence submitted by the Churches’ Legislation Advisory Service (SCDB 02)


Who we are

1. The Churches’ Legislation Advisory Service [CLAS] is an ecumenical charity registered in England and Wales [no. 256303] that brings together all the major Churches in the United Kingdom (and, because the ecumenical umbrella bodies are members, many of the smaller Churches as well), together with the United Synagogue: we currently have 29 denominations in membership across the UK. Though we are a charity composed of religious organisations our focus is not ‘religious’ as such; rather, our primary purpose is to represent our members’ views on issues of secular law as they affect their interests and to alert our members to relevant secular policy developments. We made a submission to the earlier Call for Evidence on the Gift Aid Small Donations Scheme [GASDS] and we welcome the opportunity to comment on the small charitable donations provisions of the Bill.

2. In that connexion, we note the recent statistics from HMRC, which revealed that the Scheme was worth only £26m to charities in FY 2015/16. The projection in Budget 2011 (which first introduced it) was that the GASDS would be worth £50m in its first year, rising to £85m by FY 2014/15. The Churches have almost certainly been the main beneficiaries to date, not least because all but the very smallest ones have been operating Gift Aid schemes for a long time. But the HMRC’s figures suggest that the Scheme is either poorly understood by some potential claimants or that the rules for making claims are unduly restrictive, or both.

The small charitable donations provisions of the Bill

3. We welcome the overall thrust of the Bill’s small charitable donations provisions; however, we hope that the Committee might give some thought to the following issues:

· The matching rule: at the moment, the requirement is for 10:1 matching between small donations and Gift Aid claims. While this is a vast improvement on the original proposal for 1:1 matching, we have anecdotal evidence that it still causes problems for some charities with very small Gift Aid claims. We wonder whether it might at least be extended to 20:1. Alternatively, is there a need for a matching rule at all, so long as the charity makes a Gift Aid claim in the year for which it makes a claim under the GASDS? It appears to us that it is the act of making a Gift Aid claim that is the safeguard, not the size of the claim itself.

· The rule that there must be at least six events annually in a community building and that they must be attended by at least ten people: this bears rather harshly on isolated rural congregations. While we fully understand that there must be some kind of threshold for what constitutes an event in a community building, we wonder if, at the very least it might be possible to allow for averaging the attendance across the six events.

· Charities running charitable activities in community buildings: Clauses 3 and 4, as drafted, seem to imply that where, for example, a parish or a ministerial charge has more than one church building it will be possible for it to claim to claim top‐up payments in respect of small donations of more than £8,000 in a tax year for each of them. Is our understanding correct?

The amendments

4. Amendments 1, 2 & 3: We would support the extension of the GASDS to payments by text and SMS – even though it would be very unlikely to be of any great benefit to any of our members – simply because we cannot see any worthwhile intellectual distinction between contactless payments and text and SMS payments and it would be a future-proofing measure to include them. We are less sure, however, of the need to bring payments by cheque into the scope of the GASDS because we can see the force of the argument that if a donor can sign a cheque, s/he can presumably complete a Gift Aid declaration at the same time. It would obviously be to our advantage if payments by cheque were included; but we can understand why the Government has always set its face against including them.

5. NC1: We would strongly support an assessment of the abolition of the 10 per cent Gift Aid donations threshold.

6. NC2: We would strongly support an assessment of the efficacy of anti-fraud measures.

7. NC3: While we can understand the desire to remove youth organisations from the operation of the connected charities rule, we wonder if NC 3, if enacted, would hybridise the Bill. There are other youth organisations – the Boys’ Brigade, the Girls' Brigade and the Woodcraft Folk are just three examples – which could equally well fall foul of the connected charities rule. If our contention that the organisations listed in NC 3 do not form a distinct and exclusive class is correct, then surely the amendment, if made, would affect ‘a particular private interest in a manner different from the private interests of other persons or bodies of the same category or class’. That said, however, there is a problem here; and we would support a review of the overall position by the Government with a view to bringing forward an amendment on report. One of the strongest arguments for doing so is that it would ensure that such charities will be able to benefit from the ‘outside the community building’ provisions – which the Government brought in precisely for those types of charities.

October 2016


Prepared 17th October 2016