Millions of taxpayers who donate to charity could be missing out on tax refunds because they do not make a claim.
Higher-rate taxpayers risk losing an average of £159 – while additional-rate taxpayers could miss out on as much as £198.75.
Claims can either be made on your 2023-24 tax return (by January 31) or by contacting HMRC directly.
Donations to charity are free of tax – that means if you give money from an income-taxed pot, it is refunded.
The Gift Aid scheme allows charities to claim the tax back from HMRC automatically. If you sign up to the scheme through a Gift Aid declaration, the charity can claim an extra 25p for every £1 you donate.
Helping hand: Donations to charity are free of tax – that means if you give money from an income-taxed pot, it is refunded
Charities only claim back the basic income tax rate of 20 per cent, though.
If you are a higher or additional-rate taxpayer, you can ask HMRC for the remainder. But 39 per cent of this group are not aware they can claim personal tax relief on donations, says the Charities Aid Foundation. The typical annual donation amount of higher and additional-rate taxpayers is £636.
A 45 per cent rate taxpayer donating that exact figure to charity with a Gift Aid declaration would bring their tax bill down by £198.75.
Donations are eligible for Gift Aid so long as they are no more than four times what the donor has paid in tax that tax year.
Claim up to four years’ worth of previous donations through HMRC’s ‘overpayment relief’.
You can also opt into Gift Aid on donations made to charity shops by completing a form.
