Almost half of donors do not claim Gift Aid

Around half of charity donors do not claim Gift Aid when they gave money to a charity last year, research has revealed.

Despite an increase in the number of donors using Gift Aid it was not used by 46% of charity supporters last year, research carried out by the Charities Aid Foundation has shown.

CAF says that charities are currently missing out on £500m in Gift Aid each year through the scheme, whereby good causes can reclaim income tax on a donation made by a UK taxpayer and increasing the value of money given.

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

“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 urges donors to make a Gift Aid declaration to the charity they support. Also, self-assessment higher rate taxpayers could be entitled to personal tax relief and may be able claim for donations in previous years.

CAF says the message to self-employed taxpayers is particularly relevant as the deadline for completing their self-assessment tax return on 31 January.

“Higher rate taxpayers who complete a self-assessment can also claim back the difference between higher rate and basic rate tax on the value of their donations in personal tax relief,” CAF added.

“For a 40% rate taxpayer this means that for every £10 donated, an extra £2.50 will go to the charity in Gift Aid, and they can claim back another £2.50 provided they made a Gift Aid declaration to the charity.”

CAF added that just over half (54%) of those with an income over £50,000 a year are aware they can claim tax relief on donations to charity while a third (35%) are unaware.

“Individuals can also claim for relief for four years’ worth of previous donations through tax ‘overpayment relief’ with HMRC,” it said.

Research last year suggested that the charity sector is missing out on more than £940m a year because donors are failing to claim tax relief, including Gift Aid, on the money they give.