Commentary on Sections Section 3: Meaning of “small donation”
28.Section 3 defines what is meant by a “small donation” and explicitly excludes membership fees from being small donations for the purposes of the scheme. Subsection (2), read together with section 18(1) and (2), requires charities to apply small donations for charitable purposes and CASCs to apply small donations for qualifying purposes if the donations are to qualify under the scheme. It follows that any part of a small donation which is applied for non-charitable purposes (for charities) or non-qualifying purposes (for CASCs) does not qualify as an eligible small donation on which a top-up payment claim can be made. This approach, to deny a claim (or part of a claim) for a top-up payment where the underlying donations are not used for charitable or qualifying purposes, is in line with the Gift Aid rules where donations applied for non-charitable or non-qualifying purposes do not qualify for tax relief. This provision does not apply to the bodies listed at subsection (3) of this section in order to maintain consistency with the Gift Aid rules.