Amendments to the Gift Aid Small Donations Scheme (GASDS) could boost payments to charities by around £15 million a year, MPs have been told.

Rob Wilson, the Minister for Civil Society, told MPs that provisional estimates from HM Revenue & Customs (HMRC) signalled that changes introduced in the Small Charitable Donations and Childcare Payments Bill could significantly increase uptake.

The Gift Aid Small Donations Scheme allows eligible charities and community amateur sports clubs (CASCs) to claim ‘top-up’ payments on cash donations of £20 or less.

The Bill, which was presented in the House of Commons last month, proposed changes to the GASDS which include the removal of the two-year rule. Under this rule, charities must have been registered for at least the past two years before they can access the scheme.

The Bill would also omit the requirement that charities must have made successful Gift Aid claims in at least two of the previous four years. The changes would enable newly formed charities to access the scheme, and would allow small donations made by contactless payment to be covered by the scheme.

Mr Wilson told MPs that 21,300 charities used the GASDS in 2015 to claim a total of £26 million in small donations relief.

He acknowledged that this was less than what was forecast, but the Government wanted to ensure that as many charities as possible could benefit from the scheme.

He said: “The changes in the bill will make the Gift Aid Small Donations Scheme significantly more flexible and generous.

“HMRC’s provisional estimates suggest that the reforms could benefit charities by up to £15 million a year, given that the 9,000 new charities that apply for recognition by HMRC each year are now entitled to claim top-up payments much sooner.”