Charity Changes from April 2019

Posted on 10th May 2019 by Streets -  What's trending?


Image to represent Charity Changes from April 2019

GIFT AID SMALL DONATIONS SCHEME (GASDS)

Many charities know about Gift Aid but the Gift Aid Small Donations Scheme (GASDS) is less well known.

Donations made via Gift Aid mean charities and community amateur sports clubs (CASCs) can reclaim income tax which the donor has paid – worth an extra 25p for every £1 given on donations.  It doesn’t cost the donor anything extra, but they do need to be a UK tax payer and complete a formal gift aid declaration for each charity they support. 

GASDS applies to charities which already use the gift aid scheme and enables some charities to claim a 25p for every £1 given in small cash or contactless card donations (no cheques allowed!).  The refund and claims process operates like gift aid but no individual declarations are required from donors.    A charity must have claimed Gift Aid in the same tax year as it wants to claim GASDS.

The maximum amount of GASDS top up available is £2,000 a year, based on cash donations of £8,000. Whilst the overall amount recoverable remains unchanged, the maximum amount for individual each qualifying donation is increasing from £20 to £30, for donations made on or after 6 April 2019.

See the HMRC website for more details:

https://www.gov.uk/donating-to-charity

https://www.gov.uk/claim-gift-aid/small-donations-scheme

SMALL CHARITY TRADING EXEMPTION

It is a common belief that charities are exempt from corporation tax, but that is only true when certain conditions are met. 

Charities can claim an exemption from corporation tax on any income arising from primary purpose trading i.e. delivering its charitable services as long as all the income and gains have been, or will be applied, for charitable purposes.  Any other trading activities, such as those run solely to generate funds for the charity, are potentially subject to corporation tax.

HMRC announced in last year’s Budget that the small trading tax exemption limits for charities would be increased in April 2019, where the trade does not relate to a charity’s primary purpose.

The present thresholds are:

charities table 1

And these are being increased to:

charities table 2

The Charity Commission guidance “Trustees trading and tax: how charities may lawfully trade (CC35)” explains how a charity can trade itself, and when a trading subsidiary should be established.

 


No Advice

The content produced and presented by Streets is for general guidance and informational purposes only. It should not be construed as legal, tax, investment, financial or other advice. Furthermore, it should not be considered a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information provided by Streets is of a general nature and is not specific for any individual or entity. Appropriate and tailored advice or independent research should be obtained before making any such decisions. Streets does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of obtaining Streets' visual or audible content.

Information

The content used by Streets has been obtained from or is based on sources that we believe to be accurate and reliable. Although reasonable care has been taken in gathering the necessary information, we cannot guarantee the accuracy or completeness of any information we publish and we accept no liability for any errors or omissions in material. You should always seek specific advice prior to making any investment, legal or tax decisions.


Expert insight and news straight
to your inbox

Related Articles


Budget 2024: Changes to the Non-Dom Regime and their Implications

In the wake of the Budget 2024 announcements, significant changes to the UK's non-domiciled individual (non-dom) regime are on the horizon, with scheduled implementation for 6 April 2025. However, uncertainties loom, especially considering the potential shift in political power after the next General Election. While the outlined reforms ...


How do you avoid financial forecasting that ends up with rain instead of sunshine?

Financial forecasting can often feel like the weather forecast, financial predictions not always being as rosy as planned, or in many cases, as hoped - a bit like the weather whilst sunshine is predicted rain all too often can be the outcome.  Whilst many businesses will look to ...


Working Capital Cycle

The longer the working capital cycle, the more time it takes for your business to get a robust cash flow. It’s good practice for businesses to manage their cycle by looking at each step where possible. This could be by selling stock or product quicker, collecting monies owed ...


You might also be interested in...