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Would you like to know one of simple ways individuals can enjoy tax relief in the UK?

Receiving tax relief in the Uk

Having an understanding of how to reduce your income tax could be one of your plans for the New Year because let’s be sincere nobody wants to pay more tax than they are expected to pay.

One simple way of reducing the tax paid is by making claims from donations made to charity.

In the UK, donations given to UK charities or community amateur sports clubs (CASC) are tax-free.

The reason is that there will be a tax relief that can be claimed on the donation made.

This can either be claimed by the individual or the charity that received the donation.

tax relief

Method of claiming tax relief from donation to charity

One of the methods of enjoying tax relief from donations is through gift aid.

When donations are made through the gift aid, the UK registered charities would claim 25p from every £1 donated to them by the charity.

For them to be able to make this claim they would be registered in the UK as a charity and also Recognised by HMRC for gift aid claims.

The individual must also be a UK taxpayer before the charity can make such claims.

Please note that this tax relief only relates to individuals and is not limited to companies, donations of shares, or when they are paying for goods or services or made because your charity or CASC bought goods and services.

How much higher rate/additional rate do taxpayers receive tax relief?

The charities are only allowed to claim 20% of tax paid by the individuals.

Therefore with basic taxpayers, only charities enjoy tax relief.

However, with a higher rate/additional rate taxpayers, they can claim extra tax relief on the remaining tax paid (20%/25%) from the HMRC.

To enjoy this tax relief, they would have to contact HMRC, make the claims, and receive a tax refund.

tax relief

Other methods of enjoying tax relief from donations to charity.

Another method of enjoying tax relief from donations made to charities is through Payroll giving scheme.

Under the Payroll giving scheme, the taxpayer would donate to charities without paying taxes on it.

The employer has to run a payroll-giving scheme for the taxpayer to enjoy this tax relief because it is enjoyed at the source.

Unlike under the Gift aid scheme, the employer enjoys full tax relief from the donations made to charities.

For example, when Jack donates £100 to a charity,he will enjoy tax relief of 20% /40%/45% and pay lower tax in the month the donation was made.

tax relief

How to claim tax relief on donations made to charities under gift aid.

For higher rates and additional rate taxpayers, they will register under the self-assessment or contact the HMRC.

When the first claim is made, they will be given a tax refund either sent directly into the accounts or via cheque sent.

However, the tax code of the individual will be adjusted so that they will enjoy tax relief every month rather than waiting till the end of the tax year to make tax relief.

Please note that if you stop making donations after the claims, you should contact HMRC immediately to change your tax code.


A lot of taxpayers are entitled to this tax relief and have not made the claims.

An important advantage to making claims under the gift is that the claims can be backed up to 4 tax years.

However, when the taxpayers make the claim after the time limit, they would lose this refund from the donation made in the previous years.

If you need support with making these claims or any other support with your person or business tax support, kindly contact us