Millions of high earners in UK do not know about tax relief on donations

Nearly half (47%) of those in the UK’s top tax brackets are unaware that they can claim tax relief having made donations to charity.

This is according to a YouGov survey for Charities Aid Foundation (CAF), which also says that this number has grown from 39% this time last year.

Nearly 8m Britons are eligible for this tax relief due to being higher and additional rate taxpayers – meaning that they earn more than £50,271 (€57,700) a year, or £43,663 in Scotland.

If a taxpayer gives £100 to charity, the charity may claim an additional £25 in Gift Aid. If the donor is a higher rate taxpayer, they can also reduce their tax bill by £25 – or slightly more if they are based in Scotland, or are an additional rate taxpayer with annual earnings exceeding £125,140 (€143,500).

Even though more than half of those 8m are aware of the relief being available, only half of that group (meaning around 2m people in total) actually make use of it.

A third (30%) of those who do claim the tax back say they do it in order to give additional money to charity, and 24% say that an accountant or financial adviser recommended doing it.

Another quarter of those taxpayers are aware of the incentives but don’t claim anything back, with the most common reason being that they didn’t keep a record of their donation.

Two in three (65%) of higher and additional rate taxpayers made charitable donations in the last 12 months, versus 55% of the population as a whole.

They are also more likely than the average donor to ensure the charity is able to claim Gift Aid (69% versus 60%), even if they do not then take the next step of claiming back the tax for themselves.

Mark Greer, managing director at Charities Aid Foundation (CAF), says:

“As the number of people donating falls, and charities are under increasing strain, it’s important that more people understand the tax incentives available when giving to charity. 

“With more people expected to enter higher tax brackets, knowing this relief is on offer to them could encourage higher rate taxpayers to consider donating more, unlocking additional funds for these crucial services. It’s great that advisers are raising the topic with their clients and we encourage more to do the same.”

As Fundraising Europe noted last year, the number of UK residents who gave money each year dropped by 4m between 2019 and 2024.

Picture by Tim Alex on Unsplash