Commentary on Sections Section 4: Connected charities
31.Section 4 deals with the case where none of the connected charities or CASCs is running charitable activities in a community building. It applies only to connected charities or CASCs that are eligible charities or CASCs for the purposes of the scheme in that tax year: connected charities or CASCs that are not eligible for the scheme are disregarded. For example, if three charities are connected under the provisions of section 5 but only one of them is eligible to make a claim under the scheme in that tax year then the charity does not fall within section 4.
32.Subsection (2) of section 4 determines that the small donations received by each of the connected charities or CASCs are essentially pooled. The specified amount of £5,000 is divided by the number of connected charities or CASCs that make a claim under the scheme in respect of small donations received in the tax year. So if the connected charities or CASCs decide that only one of them is to make a claim, that one is entitled to make a claim in respect of up to £5,000 of small donations received by any of the connected charities or CASCs. The one charity or CASC that makes a claim does not need to have received £5,000 of small donations in its own right, the small donations have been pooled. It follows that if two connected charities decide to make a claim under the scheme in the same tax year, the specified amount of £5,000 is divided into two, and each of the charities is entitled to make a claim in respect of up to £2,500 small donations, again from the pool of small donations received by connected charities.
33.It is up to the connected charities or CASCs to decide how many of them are to make a claim. However, each charity’s or CASC’s claim must be matched with Gift Aid donations received by the charity or CASC itself at a rate of 10% of Gift Aid donations to small donations; the Gift Aid donations matched under section 1(4)(a) are not pooled between the eligible charities and CASCs.