Just under half of donors did not claim Gift Aid when they gave money to charity last year, according to research by the Charities Aid Foundation (CAF).

It found that while the number of donors using Gift Aid has grown over the last year, it is still being underused by those who pay income tax. Only 55% of donors say they claimed Gift Aid last year.

Charities are currently missing out on as much as £560m in Gift Aid each year through the scheme, whereby charities can reclaim income tax on a donation made by a UK taxpayer.

For a basic rate taxpayer, a quarter is added to the value of their donation through the scheme, meaning a £10 gift is effectively worth £12.50 but only if the donation is declared.

The warning has been made as more than 12m people who are self employed or earn over £100,000 are due to complete their self-assessment tax return ahead of the end of this month.

They are being urged to ensure they claim Gift Aid relief on their donations in their return.

“Charities miss out on millions every year from generous donors who forget to tick the Gift Aid box,” said CAF managing director for giving and impact services Mark Greer.

He advised tax paying donors that “with the cost-of-living causing many to cut-back, there are some relatively simple ways to make sure the charities you care about are getting the most from your donation”.

He added: “If you haven’t already, make a Gift Aid declaration to the charity. If you complete a self-assessment and are a higher rate taxpayer, you may also be entitled to personal tax relief, and you can also check whether you can claim for donations in previous years.”

CAF points out that donors can claim for relief for four years’ worth of previous donations through tax ‘overpayment relief’.

It is advising donors to declare a donation to claim Gift Aid as well claim tax relief for previous years.

It also urges those who gave shares to charity to declare this form of gift.

“This is a relatively little-known way to give to charity, but it is also very tax effective. You can give shares directly to charity as long as they are listed on a recognised stock exchange,” said CAF.

“Donors will get full tax relief on any capital gains tax. You can also claim income tax relief on the fair market value of shares.”

In addition, donors are being urged to let charities know if their financial circumstances change.

“The amount of tax you pay needs to be at least equal to the value of Gift Aid the charity will claim on your donations,” it said.

“If circumstances change and you no longer pay enough tax, it’s important to tell all the charities you support. If you don’t tell them and they continue claiming Gift Aid, you may need to pay any difference back to HMRC.”

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