Charity bodies have called on HM Revenues & Customs (HMRC) to make the Gift Aid Small Donations Scheme (GASDS) "clearer, simpler and broader".
Their plea comes in response to a government consultation after an admission by HMRC that the system needs to be simplified and the number of charities that can claim increased.
The GASDS allows charities to claim Gift Aid-like relief on small cash donations of up to £20 without individual paperwork. The limit is due to be raised to £8,000 in April, which will help charities claim more.
In response to the consultation, a group including the Charity Finance Group, the Institute of Fundraising (IoF) and the NCVO say they want the scheme to be more accessible to smaller charities. They also added that it "has not lived up to expectations".
The organisations want all charities that are eligible for Gift Aid to be able to claim under the scheme. At the moment it is just those who have made a minimum number of claims in recent years.
They have also said that the matching requirement, under which charities must claim £1 in Gift Aid for every £10 claimed under the scheme, should be scrapped.
"The latest Charity Tax Statistics state that only £27 million has been claimed through the GASDS, significantly less than the original estimations that the scheme would be worth £135 million by 2014/15," the submission said.
A total of five organisations ran a survey of 340 charities, on which they based some of their consultation response.
Other recommendations include making all non-Gift Aid donations under £20, including cash, cheques, text and digital donations, eligible for the GASDS and rewriting the GASDS guidance to make it more "user-friendly".
Daniel Fluskey, Head of Policy at IoF, said: "We want the Gift Aid Small Donations Scheme to work as successfully as it can. It's fair to say that, while the scheme is well intentioned and needed, it hasn't had the uptake that was hoped for.
At Nicklin, our specialist team can provide expert advice on Gift Aid and other relevant tax relief schemes for charities. For more information, please contact us.