Tax reliefs for charities & donors rise 3% YOY with Gift Aid remaining steady
Melanie May | 31 July 2024 | News
Tax reliefs for charities and their donors reached over £6 billion for the tax year to April 2024, up 3% year-on-year, according to the latest figures from HMRC.
Charities received £4.46 billion in tax reliefs, up 3%, while donors received £1.57 billion – a rise of 1%.
Gift Aid remains steady – but more charities receive it
The Charity Tax Relief stats, published today, show too that Gift Aid remained steady, with £1.6 billion in Gift Aid paid to charities at the basic rate of Income Tax. However, HMRC says there is in fact ‘a small underlying upward trend’, due to a small proportion of payments that were slightly delayed from early 2022.
Advertisement
The number of charities receiving Gift Aid rose 3% to over 66,000, with slightly more than half of the value of these payments going to charities that received less than £1 million each – a little more than the previous year.
Payments to the Gift Aid Small Donations Scheme were £30 million, level with the previous year.
Self Assessment declarations rise but amount donated falls
More than 1.3 million people declared a donation on their Self Assessment return for the tax year ending April 2023: about 1% more than the previous year. However, the amount declared fell slightly: £3.9 billion in donations of all types, which is 3% less than the previous year.
HMRC notes that likelihood to donate increases with income and age. 7% of Self Assessment taxpayers with income under £50,000 declared a donation compared to 37% of those with income over £250,000. However, donors earning under £50,000 donated the largest proportion of their gross income compared with higher earners, at 3.3% of their income on average.
21% of Self Assessment taxpayers over 65 year old or more declared a donation, and donors aged 65 and over donated the largest proportion of their gross income compared to younger donors, at 3.8% of their income on average.
HMRC also says that women are more likely to declare a donation than men, at 13% compared to 11%.
Fewer people donating via Payroll Giving
Figures for payroll giving relief in the tax year ending April 2024 are not yet available but are estimated by HMRC to have remained steady at around £40 million. It includes figures for 2023, which show that fewer employees participated in the scheme at 483,000, compared to 516,000 in the previous year.
Responding to this, Philippa Cornish, CAF Head of Corporate Clients, said:
“It’s concerning that the number of employees taking advantage of payroll giving continues to decline. This valuable benefit is easy, tax effective and flexible. Give As You Earn also provides charities with a reliable and regular income – particularly as many face funding challenges.
“But our research shows there are clear opportunities to turn this downward trend around, with young people especially likely to say they would use such a scheme if it was offered. Despite the benefits for a responsible business, fewer employers are now offering payroll giving to their staff. That’s why we would like to see a renewed and joined-up focus on promoting payroll giving from providers, employers and the Government.”
Related posts
New edition of Charity Tax Map offers guidance on tax reliefs and compliance
Three-year transition period for Gift Aid relief when basic income tax rate falls to 19%
UK charity tax receipts remain broadly steady
CAF urges people to remember to claim Gift Aid relief as Self-Assessment deadline looms
About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.