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Gift Aid and GASDS, explained for new treasurers
If you've just taken over the accounts at a mosque, church or small charity, this is the single largest pot of money you're probably not claiming. Here's how both schemes work, without the HMRC prose.
Gift Aid, in one paragraph
A UK taxpayer has already paid income tax on the money they give you. Gift Aid lets your charity reclaim the basic-rate tax on that gift — 25p for every £1. A £20 donation becomes £25. It costs the donor nothing extra. To claim it you need a declaration from the donor confirming they're a UK taxpayer and want Gift Aid applied, along with their name and home address details.
GASDS: the one most people miss
The Gift Aid Small Donations Scheme exists precisely because you cannot chase a declaration from someone who dropped £20 in a bucket and left. It lets you claim a Gift-Aid-style top-up on small donations with no declaration at all.
- Applies to donations of £30 or less, made in cash or by contactless payment.
- You can claim on up to £8,000 of small donations per tax year, which is a top-up of up to £2,000.
- No donor names, no addresses, no declarations — but you must keep records of the donations themselves.
Note the wording carefully: cash or contactless. A contactless card tap on a donation terminal qualifies. A donation made by bank transfer or open banking does not fall within the contactless definition, so a well-run setup uses GASDS for anonymous taps and full Gift Aid declarations wherever the donor is willing to give details.
The practical problem: nobody asks
Almost every treasurer we speak to is losing Gift Aid for the same reason. The donation happens in a lobby, at a till, after prayer — and the declaration form is in a folder in the office. Chase-ups after the fact recover a fraction of what was available.
This is why the moment matters more than the paperwork. A terminal that asks "add Gift Aid at no cost to you?" immediately after the donation, and captures the answer in one tap, converts at a completely different rate to a clipboard by the door. It's the same money, claimed at the only moment the donor is standing in front of you.
What you need in place
- HMRC recognition for your charity or CASC for Gift Aid purposes — that's the prerequisite for everything else.
- Records: declarations for Gift Aid, and donation records for GASDS. HMRC expects these to be kept and can ask to see them.
- A way to file: Charities Online, either yourself, via a spreadsheet, or through software that files for you. If someone files on your behalf they must be authorised — HMRC form ChV1 names them as your nominee or agent.
- Awareness of the community-buildings rules if you run collections at more than one site — GASDS has separate allowances for donations collected in community buildings, which is worth checking if you operate across several premises.
A rough sense of scale
A masjid taking £120,000 a year in donations, where half is Gift-Aid eligible and declared, reclaims £15,000. Add GASDS on small anonymous taps and the annual cap of £2,000 comes into view too. Against that, the fees you pay on the payments themselves are a rounding error — which is exactly why Gift Aid deserves the first hour of a new treasurer's attention, not the last.