With the start of the new tax year rapidly approaching, here is a reminder of a few key tax changes impacting charities that come into effect in April 2019:
Charities’ Small Trading Exemption
Charities can still be exempt from paying tax on trading income that does not relate to their primary purposes as long as such turnover does not exceed the small trading tax exemption.
From 1 April 2019, the limits are as follows:
|Annual charity income||Maximum level of non-primary purpose trading|
|£32,000 – £320,000
(was £20,001 – £200,000)
|25% of income
The increases in these limits will allow charities to carry out more non-primary purpose trading activity before a trading subsidiary is required.
Gift Aid Small Donations Scheme
The Gift Aid Small Donations Scheme (GASDS) allows charities and community amateur sports clubs to claim a ‘Gift Aid style’ top-up on cash donations received without the need for the donor to complete a Gift Aid declaration. This scheme therefore allows Gift Aid to be claimed on donations in collection tins or buckets.
In order to be eligible for the top-up payment, individual donations must not exceed £30 (this limit is £20 up to 5 April 2019). The total claim of £2,000 (on donations of £8,000) remains unchanged.
Gift Aid Donor Benefits
With effect from 6 April 2019, the rules around the value of donor benefits are being changed. As long as the value of the benefit does not exceed certain limits the donation will still qualify for Gift Aid.
The new rules are:
|Donation amount||Value of benefit|
|Up to £100||25% of amount of donation|
|Over £100||25% on first £100; and
Up to 5% of donation in excess of £100
(subject to maximum benefit value of £2,500)
For any advice on how these changes impact your charity, please get in touch.