National statistics

UK charity tax relief statistics commentary

Updated 12 July 2023

Summary

For the tax year to April 2023, tax reliefs for charities and their donors, where an estimate is available, were just under £6.0 billion, up 8% year-on-year.

Estimates for the largest tax reliefs are:

• £2.4 billion relief of non-domestic rates (business rates), level with the previous year
• £1.6 billion in Gift Aid paid to charities at the basic rate of Income Tax, up 19%
• £790 million Inheritance Tax reliefs for donations, up 1%
• £740 million Higher Rate Relief - relief at higher rates of tax on individuals’ Gift Aided donations - up 12%
• Table 1 of these statistics is a complete year-by-year summary of these and all other charitable reliefs for which annual estimates are available

Slightly more than half of the value of Gift Aid payments went to charities that received more than £1 million each, a little more than previous years (Table 2).

More than 1.2 million people declared a donation on their Self Assessment return for tax year ending April 2022, about 2% more than the previous year. They declared £4 billion in donations of all types, which is 14% more than the previous year.

This year, following a consultation with users of our statistics, we have made several changes. We have:

• discontinued the old Table 3, which repeated information in Table 1
• renumbered the tables
• removed the median columns from the tables about donations by Self Assessment taxpayers

Contact us

We welcome your comments on this commentary and other aspects of these statistics at personaltax.statistics@hmrc.gov.uk.

Media contact: news.desk@hmrc.gov.uk

About this release

Frequency: Annual

Coverage: UK

Theme: Economy

Next release: We expect to publish an update in Summer 2024.

This statistics release is the annual update of reliefs for charities and their donors.

Related publications

Whilst we cannot comment on the accuracy of external statistics, these resources offer complementary coverage on UK charities.

• the section on charitable giving in DCMS’s Community Life Survey
• the Charities Aid Foundation (CAF)’s UK Giving report 2023
• an overview of Charity Commission for England and Wales statistics
• data and research by OSCR, the Scottish Charity Regulator
• data from the Northern Ireland Charity Commission

Table 1: Summary of UK tax reliefs for charities and donors

For the tax year to April 2023, tax reliefs for charities and their donors, where an estimate is available, were just under £6.0 billion, up 8% year-on-year.

This is comprised of:

• £4.3 billion of reliefs for charities, up 8%
• £1.7 billion of reliefs for donors, also up 8% year-on-year

Gift Aid

Charities may claim the basic rate of Income Tax on qualifying donations by individuals.

In the tax year to April 2023, HMRC paid charities £1.6 billion in Gift Aid, up 19% year-on-year.

Most of this increase was caused by existing charities increasing the value of their claims. A smaller part of the increase was due to HMRC putting on hold more claims than usual in March 2022 for extra risk assessment. Most affected claims were paid in April and May 2023, and these now appear in the data for tax year ending April 2023.

We explore the rise in Gift Aid more in the section for Table 2 (below), which breaks down Gift Aid by value of payments per organisation.

Whilst reviewing HMRC’s processes in 2023, we discovered an additional £20m worth of Gift Aid claims paid in the tax year ending April 2018. This is not currently included in our data tables. There is ongoing work to confirm the robustness of our data.

Gift Aid Small Donations Scheme

The Gift Aid Small Donations Scheme is related to the main Gift Aid scheme but is much smaller and separate. This scheme permits charities to claim the equivalent of basic rate Income Tax for some smaller donations when the donation is made by someone who is physically present. This is technically government expenditure rather than a tax relief, but we show it in Table 1 for completeness.

Payments under this scheme recovered from £20 million to around £30 million in tax year ending April 2023.

Non-domestic rates relief

Also known as ‘business rates relief’, this allows charities an 80% reduction in the corresponding business rate; some authorities top this up by a further 20% resulting in complete exemption.

This relief is fairly stable in recent years and continues to be the largest single source of tax relief granted directly to charities. In tax year ending April 2023 it is forecast to be just under £2.4 billion, about level with the previous year.

Stamp Duty Land Tax

This tax is payable when buying or leasing land or property, and is relieved for charities, who do not have to pay it when buying a property. The cost of this relief may vary with changes in the tax regime and property prices as well as other factors.

Stamp Duty Land Tax is collected in England and Northern Ireland. Before April 2018 and April 2015, property transactions in Wales and Scotland respectively were included, but these taxes have now been devolved and replaced with separate land and buildings transaction taxes, and no longer appear here after those dates.

Relief of Stamp Duty Land Tax for charities fell from £280 million per year before Covid to £140 million in tax year ending April 2021 and £190 million in the tax year ending April 2022, coinciding with the government’s reduced rates of Stamp Duty from 8 July 2020 to 30 September 2021. The value has now recovered to £270m, in the year to April 2023.

The figure for the most recent tax year is provisional: we will update this data in the next release of these statistics.

Chart 1a visualises the data in Table 1 about reliefs for charities.

Inheritance Tax (IHT)

This is a wealth transfer tax. Estimates of this tax tend to be revised more than other reliefs, due to the longer time between liability arising and information becoming available to HMRC.

For tax year ending April 2023, Inheritance Tax relief for charitable donations was estimated to be £790 million, an increase of 1% year-on-year. This is a relatively small change compared to the other large reliefs in these statistics.

There is always some uncertainty in this relief for the most recent tax years due to the relatively small number of relatively large taxpayers. We will update this column in the next release of these statistics.

Higher rates of tax on Gift Aid

Sometimes called “higher rate relief”, this allows individual donors to reclaim tax at a rate equal to the difference between their marginal rate and the basic rate on donations where Gift Aid has already been claimed by a charity. This is explained in more detail in the Gift Aid guidance at gov.uk.

For tax year ending April 2023, we will not know the value of donations taxpayers will declare until Self Assessment returns become due in 2024, so we have forecast this figure for Table 1 as usual. Our provisional forecast of higher rate relief is £740 million, an increase of 14% year-on-year. We expect that the value of donations rises consistently with an increase in the underlying amounts charities claim via Gift Aid.

In the tax year ending April 2022, the average amount donated per donor increased, which led to an increase in the amount of higher rate relief claimed, to £650 million. This is higher than we published for that tax year in our 2022 statistical release, because we have now replaced a provisional forecast with data from tax returns.

Chart 1b visualises the data in Table 1 about reliefs for donors.

Table 2: Gift Aid payments to charities

In the year to April 2023, HMRC paid charities and community amateur sports clubs £1.6 billion in Gift Aid, up 19% year-on-year.

The total value of Gift Aid has been fairly stable in recent years, but has risen sharply in the most recent year. We estimate that these factors contributed the most to the increase in Gift Aid:

• existing charities increased the value of their claims - 190 charities received £1 million or more in Gift Aid, up 27% on the year before
• HMRC put on hold more payments than usual in March 2022 for additional checks -most affected claims were paid in April and May 2022, and these now appear in the data for tax year ending April 2023

This year, new charities claimed more than usual, but this was not a significant driver of the overall increase in Gift Aid.

The total number of organisations benefiting from Gift Aid fell by 2% in the year to April 2023, to just over 64,000.

Charts 2a and 2b visualise the data in Tables 1 and 2b show Gift Aid by size of organisation:

Tables 3, 4 and 5: Donations declared by individuals completing Self Assessment

At the time of release, Self Assessment data is available up to the tax year ending in April 2022.

The number of individuals declaring a donation via Self Assessment increased by 2% to 1.27 million donors. The total value of donations increased by 14% to £4.0 billion.

In these tables, a donor is defined as any individual who entered a donation in the relevant section of a Self Assessment form, that is, either in the form of Gift Aid payments or in the form of qualifying assets gifted to charity. It does not include donors who do not submit a Self Assessment return, who typically pay no Income Tax or Capital Gains Tax or the basic rate of Income Tax. The data in the most recent years is provisional because very late returns and amendments might still be made, especially to the most recent published tax year.

Calculations of donations as a proportion of income exclude individuals with nil income or where the ratio of donation to income was over 100%.

Chart 3 visualises Table 3.

Tables 4 and 5 group this data by several characteristics of Self Assessment taxpayers.

Donations by gross income

Donation amounts increase with gross income. Donors who earned a gross income of £250,000 or more donated an average £26,870 in tax year ending April 2022. Conversely, the mean ratio of gross income donated broadly decreases as gross income increases. The highest mean percentage of gross income came from donors who had a gross income of £50,000 or below at 3.4%.

Donations by age

The mean amount donated tends to increase with age. The age group that donates the highest average amount per donor is 55 to 64 year olds with a mean donation of £4,090.

Donors who were aged 65 and up donated the largest proportion of their gross income compared to younger donors, 4% of their income on average.

Donations by gender

Differences in donations by gender appear to be explained by income, at least amongst this population of Self Assessment taxpayers: amongst donors, both women and men donors donate 2.6% of their income.

Donations by UK nation, region and Parliamentary constituency

Table 5 provides geographical information and breaks down the total number of individuals declaring a donation via Self Assessment and the total value of those donations by region and Parliamentary constituency.

In terms of mean ratio of Self Assessment donors’ donations to gross income, Northern Irish donors declare the most, with an average of 4.2% of their income. The remaining regions all fall between 2.4% and 2.8%. However, the highest mean donation falls to donors from London (£6,277).

Table 6: Payroll Giving scheme

An employer wishing to set up a Payroll Giving scheme contracts with an agency approved by HMRC. Employees wishing to take part authorise the employer to deduct amounts from their pay and nominate the charities to which their gifts should go. Donations are deducted before tax which reduces the effective tax rate that the employee pays. Payroll Giving donations are not eligible for Gift Aid. The gross amount donated and the number of participating employees are estimated from information provided by Payroll Giving agencies.

This table has been updated to include the tax year ending April 2022. Data for donations in the following tax year is not expected to be available until the next release of these statistics.

Experimentally, here is a copy of Table 6 directly on this page. We welcome your comments and questions about displaying data in this format (or any aspect of these statistics) at personaltax.statistics@hmrc.gov.uk.

Tax year ending April	Gross amount donated £ millions	Cost of Income Tax relief £ millions	Thousands of employees participating, previous basis	Thousands of employees participating, current basis
2015	126	40	1,094	not available
2016	131	40	1,113	not available
2017	131	40	1,070	not available
2018	137	40	1,034	not available
2019	133	40	1,086	not available
2020	132	40	not available	591
2021	137	40	not available	545
2022	128	40	not available	516

In April 2019, agency changes to their definition of the number of participating employees removed a group of employees who participated by donating in a previous tax year, but not in the tax year being reported on. This resulted in a large apparent drop in the number of employees. However, this does not reflect a real change in the number of employees donating. We cannot back date previous years with the change in definition, so we show the number of donors from before that date in a separate data series.

We have also, as usual, forecast the value of Payroll Giving relief to taxpayers for the most recent tax year, ending April 2023, which is steady at around £40 million. This is shown in the column for Payroll Giving in Table 1.