UK charity tax reliefs 2022/23

The latest statistics show a notable increase of 19% in Gift Aid repayments compared with the previous year to £1.6 billion. Higher rate tax relief for donors on Gift Aid donations has also seen a large increase of 12% to £740 million.

The Gift Aid Small Donations Scheme, which allows charities to claim top-up payments on small cash and contactless donations, has also recovered to £30 million from a decline in the previous year. Conversely, payroll giving donations have decreased by 7%, although at £40 million this continues to be a relatively small relief in comparison to Gift Aid.

The increase in Gift Aid is significant even when contrasted with the backdrop of a 10% inflation rate over this period and is an encouraging result following a Gift Aid plateau over the previous two years that may have been largely influenced by the economic and social effects of COVID-19. The latest statistics indicate that charitable giving is rebounding and may be catching up with the real inflation-adjusted declines of recent years.

The increase of 12% in higher rate relief for donors could also be partly influenced by the impact of wage inflation pushing more taxpayers into the higher rate tax brackets, thereby increasing the scope of Gift Aid higher rate relief for a greater number of donors.

Other charity reliefs have remained consistent with the previous year. Non-domestic rates relief, the largest tax relief for charities, remains at £2.4 billion and inheritance tax reliefs have increased by 1% to £790 million. Stamp Duty Land Tax (SDLT) reliefs have recovered from £190 million to £270 million, as expected after temporarily reduced rates of SDLT came to an end in the previous tax year.

View the full publication UK charity tax relief statistics commentary.