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Small Charitable Donations and Childcare Payments Act

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The Small Charitable Donations and Childcare Payments Act 2017 received Royal Assent on 16 January. The Act makes changes to the gift aid small donations scheme (GASDS) and technical amendments to the tax-free childcare scheme. The Bill was first introduced to parliament in September 2016, following a period of consultation.

Changes to the GASDS take effect from 6 April 2017 and include:

  • removing the two-year eligibility rule and the two-in-four year claims rule, allowing newly formed charities to access the scheme;
  • allowing charities to claim for small donations totalling more than £8,000 where they have more than one community building;
  • widening the community buildings rules to allow charities to claim whichever is the more beneficial of either:

o   up to £8,000 of ‘community building amounts’ in the form of small donations made in the local authority area in which each community building is located; or

o   up to £8,000 small donations made anywhere in the UK; and

  • allowing small donations made by contactless payment.

Amendments to the tax-free childcare scheme come into force on 16 March and include:

  • allowing the standard three-month entitlement period to be varied by up to two months (currently one month); and
  • a power to make regulations requiring applications for review of HMRC decisions to be made digitally.