Small Charitable Donations Act 2012

Small Charitable Donations Act 2012

2012 CHAPTER 23

Commentary on Sections

Section 6: Charities running charitable activities in community buildings

43. Section 6 increases the “specified amount” for charities that run charitable activities in community buildings. Section 7 defines what is meant by the term “running charitable activities”. The purpose of these provisions is to increase the entitlement of charities that deliver their charitable activities through community groups. Section 6 provides a similar specified amount for charities carrying out similar activities in the local community but where the charities are structured differently. So, for example, without this provision, or the connected charity provision, a charity that is centralised and operates through local community groups would be limited to a specified amount of just £5,000 because there is just one charity. This position would contrast with the situation of a charity carrying out similar activities that operates in the local community through a number of local charities under its control which, without this and the connected charity provisions, would be entitled to a specified amount of £5,000 for each of the local charities as well as the £5,000 specified amount for the parent charity.

44. Subsection (2) of section 6 provides that the specified amount of a charity which undertakes charitable activities in a community building is made up of two parts.

• The first part consists of the small donations made to the charity by group members in a community building while it is running its charitable activities. Subsection (3) determines that this amount is capped by the total amount of small donations received in the community building, or at £5,000, whichever is the lower amount.

• The second part of the specified amount consists of the “remaining amount” which subsections (4) and (5) together define as the balance of other small donations not received from group members in a community building while it is running charitable activities or £5,000, whichever is the lower amount.

45. For example, a medical charity established to support people who suffer from a specific condition undertakes monthly meetings in two community buildings and receives small donations from attendees during the meetings. In addition, the charity undertakes a street collection twice a year to help raise funds to support its work. The charity would be entitled to make a claim in respect of up to £5,000 of small donations received in each of the two community buildings, plus up to a further £5,000 in respect of the street collections. So the charity would, in total, be eligible to make a claim in respect of up to £15,000 small donations.

46. If, in one of the community buildings, the group collects £6,000 of small donations from attendees in a year and in the other community building the group collects £1,000 in small donations from attendees in the same year then the maximum limit of the charity will be up to £5,000 (the “remaining amount”) in respect of street collections plus £5,000 collected in one community building (£6,000 received, capped at £5,000) plus £1,000 received in the other community building, that is, a total of up to £11,000.