Millions of taxpayers who donate to charities could miss out on tax refunds because they don’t file a claim.
Higher rate taxpayers risk losing an average of £159, while additional rate taxpayers could lose up to £198.75.
Claims can be made on your 2023-24 tax return (before 31 January) or by contacting HMRC directly.
Donations to charities are tax-free, meaning that if you donate money from a taxable fund, you will be reimbursed.
The Gift Aid scheme allows charities to claim tax back from HMRC automatically. If you sign up to the scheme via a Gift Aid declaration, the charity can claim an extra 25p for every £1 you donate.
Helping hand: Donations to charities are tax-free, meaning if you donate money from a taxable fund, you will be reimbursed.
However, the charities are only claiming a refund of the basic 20 per cent tax rate.
If you are a higher or additional rate taxpayer, you can ask HMRC for the rest. But 39 per cent of this group do not know they can claim personal tax relief on donations, says the Charities Aid Foundation. The typical annual donation amount for higher and additional rate taxpayers is £636.
A 45 per cent taxpayer who donated that exact figure to charity with a Gift Aid return would reduce their tax bill by £198.75.
Donations are eligible for Gift Aid as long as they do not exceed four times what the donor has paid in tax that tax year.
Claim up to four years’ worth of previous donations through HMRC’s ‘overpayment relief’.
You can also opt for Gift Aid for donations made to charity shops by completing a form.