THE small change donated in collec­tion plates, alms bags, buckets, and boxes could generate an additional £13 million a year for parishes under a new Gift Aid-style scheme, staff at Church House, Westminster, estimate.

The Gift Aid Small Donations Scheme, first announced in the Budget last year (News, 25 March 2011), will enable charities to claim Gift Aid-equivalent payments (25 pence for every £1 collected) on small cash donations of less than £20, up to a total of £5000, without the need for a Gift Aid declaration.

The scheme is designed to address the fact that donors may be reluctant to fill in Gift Aid forms when giving small amounts: for example, when giving during church-service collec­tions. Only cash donations are covered: standing orders or cheques are not eligible.

The Government introduced the Small Charitable Donations Bill (News, 11 May) to Parliament last Friday, and the scheme is expected to start next April. Those charities that undertake their charitable work in a community building, including places of worship, will be eligible for top-up payments on a further £5000 of small donations.

To be eligible, the building must be used to host a group of ten or more people (excluding staff) on six or more occasions a year. It must be a building that the public, or a section of the public, have access to at some or all times. Buildings used wholly or mainly for commercial or residential purposes are excluded.

This "community building" ele­ment of the scheme is beneficial to organisations, including the Church of England, which have a centralised structure. It means that each church in a parish can claim up to £5000 of donations. A church charity operating from a cathedral with 100 parish churches, for example, could claim top-up payments on up to £505,000 of donations (up to £5000 per church, plus up to £5000 collected by the cathedral).

The Bill includes provisions that are designed to protect the scheme from fraud, but some charities have criticised them as overly complex.

A charity will need to have a "good track record" for claiming Gift Aid for three years, before being able to make a claim under the scheme. It will also need to make at least one Gift Aid claim every year, alongside the top-up payments. The Government hopes that more charities will now claim Gift Aid.

Responding to the Government's consultation on the Bill last month, the chief executive of the National Council for Voluntary Organisations, Sir Stuart Etherington, said: "Some of the restrictions are hugely complex to understand, and we fear this will be a barrier to charities' taking part in the scheme."

But the national stewardship and resources officer at the Church of England, John Preston, said that the scheme would be "of real help to parishes. . . Some have expressed concern about complexity, but this is restricted to the claims limits, and full guidance for parishes will be avail­able around the end of the year. We anticipate the operation of the scheme will be straightforward."

It is estimated that the Church of England has more than 600,000 regular donors, of whom about 85 per cent give under Gift Aid.

The economic secretary to the Treasury, Chloe Smith, said that the Bill was part of the Government's drive to build "a more socially conscious society".