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Gift Aid and tax relief on donations: the UK charity guide (2026)
July 8, 2026
⚡TL;DR — The Short Answer
Most gifts to a UK registered charity are Gift Aid eligible, if you are a UK taxpayer, you sign a declaration, and the charity is HMRC-recognised.
The charity reclaims 25p from HMRC for every £1 you donate, turning a £100 gift into £125 at no extra cost to you.
Higher-rate and additional-rate taxpayers can claim extra relief through Self Assessment.
Raffle tickets, event-ticket purchases, and payments for goods or services are never Gift Aid eligible.
Zeffy captures Gift Aid declarations at checkout and gives charities the records they need to claim via HMRC Charities Online.
This article is educational, not tax advice. Consult a UK accountant or tax adviser for your specific situation.
Gift Aid is one of the most valuable tools available to UK charities, yet it is also one of the most misunderstood. Whether you are a donor wondering what happens to your money after you give, or a fundraising manager trying to maximise every pound your charity receives, this guide explains the mechanism clearly, covers the rules, and walks through the practical steps.
Personal crowdfunding to an individual is not Gift Aid eligible, even if the cause is charitable.
Church or place of worship donation
Yes, if the church is HMRC-recognised
Many small churches are "excepted charities" (income under £100,000) but still need HMRC recognition to claim Gift Aid.
Political party contribution
Never
Contributions to political parties are never Gift Aid eligible.
School fete purchase (cakes, tombola, raffle ticket)
No
Payment for goods or services, including raffle tickets, is not a charitable gift. Gift Aid cannot apply.
Donation of cryptocurrency
No (Gift Aid does not apply to non-cash gifts)
Higher-rate donors may get Income Tax and CGT relief on gifts of listed shares or land via Self Assessment. Confirm with HMRC or a tax adviser.
Donated goods to a charity shop
Yes, via the Retail Gift Aid Scheme
The donor signs a declaration allowing the charity to sell the goods on their behalf; net proceeds are treated as a Gift Aid donation.
Volunteer time
No
Unreimbursed volunteer expenses may be reclaimable from the charity, but no tax relief is available on the value of time given.
Online donation via PayPal or open-banking app
Yes, if the donor signs a Gift Aid declaration and the charity is HMRC-recognised
The platform or payment method does not affect eligibility; the declaration and HMRC recognition are what matter.
Cash dropped in a collection bucket with no record
Not eligible for Gift Aid unless collected via GASDS
The Gift Aid Small Donations Scheme allows a 25% top-up on small cash or contactless donations of £30 or less, without a written declaration, up to £8,000/year.
Payroll Giving via your employer
Yes (different route: deducted pre-tax, no Gift Aid declaration needed)
Comes out of gross salary before tax, so a basic-rate taxpayer's £10 gift costs them only £8.
Donation to an EU or EEA charity HMRC-recognised since 2010
Possibly, but rules narrowed post-Brexit
Verify the charity's HMRC-recognised status directly. Contact HMRC or a tax adviser for cross-border gifts.
HMRC rules: what makes a donation Gift Aid eligible
To claim Gift Aid, three conditions must all be met: the charity must be HMRC-recognised; the donor must be a UK taxpayer; and the donor must sign a valid Gift Aid declaration. The detailed rules for charities are in HMRC's Gift Aid detailed guidance.
How the Gift Aid mechanic works
If you are a UK taxpayer and you give £100 to a registered charity with a Gift Aid declaration in place, the charity reclaims £25 from HMRC. Your £100 gift becomes £125 for the charity at no extra cost to you.
Higher-rate taxpayers get additional relief on top:
A 40% taxpayer can reclaim an additional £25 via Self Assessment, so a £100 gift effectively costs them only £75.
A 45% additional-rate taxpayer can reclaim £31.25 via Self Assessment, making the effective cost £68.75.
The basic-rate reclaim goes to the charity. The higher-rate difference goes back to the donor (via their Self Assessment return), unless they choose to assign it to the charity.
HMRC recognition is a separate step from charity registration. A charity registered with the Charity Commission for England and Wales (CCEW) or OSCR or CCNI must also apply to HMRC for charity recognition and will receive a Charities Reference Number. Only after that recognition can it submit Gift Aid claims via HMRC Charities Online.
Organisations that can claim Gift Aid include:
Registered charities (CCEW, OSCR, CCNI)
Community Amateur Sports Clubs (CASCs) registered with HMRC
HMRC-recognised excepted charities (such as small churches with income under £100,000, until 2031)
You need to be a UK taxpayer
The donor must have paid enough UK Income Tax or Capital Gains Tax in the year to cover the Gift Aid reclaim. For a £100 gift, the donor must have paid at least £25 in UK tax that year.
For basic-rate donors, there is no extra action to take. The charity reclaims from HMRC via Charities Online and the donor never sees the mechanics.
For higher-rate and additional-rate donors, the extra relief is claimed by entering total Gift Aid donations on the Self Assessment return (SA100) or by asking HMRC to adjust their tax code. See gov.uk Gift Aid guidance for full details.
Non-taxpayers must not tick the Gift Aid box. If a donor has not paid enough UK tax to cover the reclaim, HMRC will pursue the shortfall from the donor personally. If in doubt, donors should leave the Gift Aid box unticked and seek advice.
What if you are not a registered charity?
This is one of the most common questions Zeffy hears from UK community groups. Gift Aid is only available to HMRC-recognised charities and CASCs. The following cannot claim Gift Aid, even if their purpose is entirely charitable:
Community Interest Companies (CICs)
Unincorporated community associations
Parent-teacher associations (PTAs) and Parent Friends Associations (PFAs) without charitable status
Village halls and neighbourhood groups not registered as charities
If you are in this position, the options are:
1. Apply for Charity Commission registration (income threshold: above £5,000 for England and Wales; all sizes for OSCR in Scotland) and then apply to HMRC for recognition.
2. Partner with an existing registered charity that can receive funds on your behalf (sometimes called a "fiscal sponsor" arrangement).
3. Accept donations gross without Gift Aid uplift, and price your fundraising accordingly.
There is no AGI-style annual cap on Gift Aid itself. The charity can reclaim on every eligible gift, provided the donor has paid enough UK tax to cover the reclaim on each donation.
The practical limits are:
Scenario
Rule
Donor paid less UK tax than the Gift Aid reclaim on a gift
Gift Aid should not be claimed on that gift; donor must not sign a declaration
Higher-rate relief claimed on Self Assessment
No ceiling, but must be claimed in the tax year the gift was made (or carried back one year)
Small cash or contactless donations via GASDS
£30 maximum per donation; £8,000 aggregate per year (yielding a £2,000 top-up); charity must have been HMRC-recognised for at least 2 complete tax years
Donor benefits received alongside the gift
HMRC allows small benefits (25% of the gift for gifts up to £100, then a tapered cap); if benefits exceed the threshold, the whole gift falls out of Gift Aid
Gift Aid Small Donations Scheme (GASDS)
GASDS lets charities claim a 25% top-up on small cash and contactless donations of £30 or less without a written declaration. The annual cap is £8,000 in eligible donations (a £2,000 HMRC top-up), and the charity must have been HMRC-recognised for at least two complete tax years.
GASDS is particularly useful at events, street collections, and church services where donors give small amounts by cash or tap. Source: HMRC GASDS guidance.
How UK tax relief works on gifts of goods, shares, and land
Gift Aid applies only to cash or cash-equivalent donations. For gifts of goods, shares, and property, three separate UK routes apply.
Retail Gift Aid Scheme
When a donor drops clothing or household goods at a charity shop, they can sign a Retail Gift Aid declaration allowing the charity to sell the items on their behalf. The net sale proceeds are then treated as a Gift Aid donation, and the charity reclaims 25p per £1 on those proceeds.
This is the standard mechanism for charity shops and is widely used by Oxfam, Cancer Research UK, and others. Source: HMRC Retail Gift Aid guidance.
Gifts of shares and securities
Donors who give qualifying listed shares or securities directly to a registered charity receive:
Income Tax relief on the full market value of the shares at the date of transfer
Capital Gains Tax relief (no CGT on the gain)
The donor claims both reliefs via Self Assessment. The charity does not reclaim Gift Aid on share gifts; the relief sits entirely with the donor. Market value for listed shares is the mid-market closing price on the date of transfer.
The same Income Tax and CGT relief applies to gifts of land or property to a registered charity. The charity issues a certificate confirming what was received and the date. A qualified valuation is needed for unlisted shares and for land or property (HMRC requires this to support the Income Tax claim).
Small-charity note: never assign a monetary value to a gift in kind on a donation acknowledgement. Describe what was received and the date; valuation is the donor's responsibility and that of their tax adviser.
What records the charity and donor need to keep
Who
What to keep
How long
Charity
Gift Aid declaration (paper, digital, or written confirmation of oral declaration)
At least 6 years after the last donation covered by that declaration
Charity
HMRC Charities Online submission records
6 years
Charity
Certificate for share or land gifts (confirming what was received and when)
6 years
Donor (basic-rate)
Bank statement or donation acknowledgement
Recommended: until the charity's claim window closes (4 years)
Donor (higher-rate, Self Assessment)
Donation acknowledgement, Gift Aid declaration reference
At least 22 months after the end of the tax year
Gift Aid declarations can be paper, digital, or oral (provided a written confirmation is sent to the donor afterwards). A single declaration can cover a series of future gifts from the same donor to the same charity; there is no need for a new declaration every time.
The charity's Gift Aid claim window is 4 years from the end of the accounting period in which the donation was received. Declarations must be kept for at least 6 years after the last donation they cover. Source: HMRC Chapter 3 Gift Aid detailed guidance.
For recurring monthly donors, a cumulative year-end summary from the charity is the most useful document for donors claiming higher-rate relief. If you are a charity, send this summary to regular donors before the Self Assessment online deadline of 31 January.
Small-charity note: the 6-year retention rule is the one to engineer your processes around. If an HMRC compliance check arrives and you cannot produce a valid declaration for a claimed donation, the reclaim is at risk regardless of how genuine the gift was.
What Gift Aid does NOT cover
Payment type
Why Gift Aid does not apply
Event ticket purchase
Payment for admission is a purchase, not a gift. The quid-pro-quo rule applies.
Raffle and lottery tickets
A ticket purchase is regulated under the Gambling Act 2005 as a small society lottery entry. It is a payment for a chance to win, not a charitable gift.
Auction lots at or below fair market value
Buying goods or services at a charity auction is not a donation. If a donor pays above fair value, only the excess may qualify.
Membership fees that confer benefits above HMRC limits
Benefits must stay within HMRC's thresholds (25% of the gift for gifts up to £100, then tapering). Above those limits, the whole gift falls out of Gift Aid.
Company donations
Companies do not use Gift Aid. They deduct charitable gifts from profits before Corporation Tax instead.
Donations from anyone who has not paid enough UK Income or CGT
The donor must have paid at least as much UK tax in the year as the Gift Aid reclaim on their gift. Non-taxpayers must not tick the Gift Aid box.
Contributions to political parties
Never Gift Aid eligible under any circumstances.
Personal crowdfunding (GoFundMe UK, JustGiving Crowdfunding) to an individual
A gift to an individual is not a charitable donation, even if the cause is genuine.
Payroll Giving donations
Payroll Giving already comes out of pre-tax salary. Do not also submit these under Gift Aid.
Raffle and lottery tickets
Gift Aid never applies to raffle ticket purchases. A raffle ticket is a payment for a chance to win a prize, regulated under the Gambling Act 2005 as a small society lottery entry. It is not a charitable gift, and the Fundraising Regulator's Code of Fundraising Practice treats it accordingly. If your charity runs a raffle, make clear in all communications that ticket purchases are not donations and are not Gift Aid eligible.
If you charge £150 for a charity dinner and the meal has a fair market value of £60, only £90 is a Gift Aid eligible donation. The charity must give donors a written disclosure of the benefit value for any gift where benefits are provided. If the benefit exceeds HMRC's limits, the entire gift falls out of Gift Aid, not just the excess.
For example: a supporter pays £200 for a charity gala ticket. The dinner has a fair market value of £75. Only £125 is Gift Aid eligible. If the charity charges £200 and the dinner is worth £180, the gift falls entirely outside Gift Aid.
1. Register with HMRC as a charity (separate from Charity Commission, OSCR, or CCNI registration) and receive a Charities Reference Number. Apply via gov.uk HMRC charity recognition. Note: Gift Aid can only be claimed on donations received after the date HMRC recognition becomes effective, so apply as early as possible.
2. Collect a valid Gift Aid declaration for every donor. The declaration must include the donor's full name, home address, the charity's name, and confirmation that the donor wants the gift treated as Gift Aid and has paid enough UK tax. Declarations can be paper, digital, or oral (with written confirmation sent to the donor).
3. Confirm that each gift is eligible: the donor is a UK taxpayer, the gift is a genuine donation (not payment for goods or services), and any donor benefits are within HMRC's limits.
4. Submit the Gift Aid claim via HMRC Charities Online (or the paper ChR1 form for charities that cannot use online services). The claim window is 4 years from the end of the accounting period in which the donation was received.
5. Keep all Gift Aid declarations for at least 6 years after the last donation they cover.
Donor-side: claiming higher-rate relief
Higher-rate (40%) and additional-rate (45%) taxpayers can claim the difference between their tax rate and the basic rate (20%) through Self Assessment. Steps:
1. Keep a record of all Gift Aid donations made during the tax year (donation acknowledgements, bank statements, or a year-end summary from the charity).
2. Enter the total Gift Aid donations on the Self Assessment return (SA100). HMRC adjusts the higher-rate relief accordingly.
3. Alternatively, contact HMRC to adjust your tax code in-year to reflect regular Gift Aid giving.
4. Use the one-year carry-back option if beneficial: higher-rate donors can carry a Gift Aid claim back to the previous tax year, provided the current-year return is filed before the previous-year deadline. This is useful for a large gift made early in a new tax year.
Charities: retain declarations for 6 years after the last donation covered. Donors claiming higher-rate relief: retain donation acknowledgements for at least 22 months after the end of the relevant tax year.
Does Zeffy handle Gift Aid?
Yes. Donations made through Zeffy to a UK charity that is HMRC-recognised are Gift Aid eligible in exactly the same way as a direct gift to that charity. Zeffy is a fundraising platform, not the recipient of the donation. Deductibility depends entirely on whether the receiving organisation is HMRC-recognised.
Zeffy captures the Gift Aid declaration at checkout, stores the required donor details (name, home address, taxpayer confirmation), and provides the charity with the records needed for submission via HMRC Charities Online. Every gift generates a donation acknowledgement automatically, sent to the donor's email the moment the gift is made.
Zeffy is trusted by 100,000+ charities and not-for-profits worldwide who have raised over £2 billion through the platform. Every gift came with a donation acknowledgement that donors and their advisers could actually use.
A note on donor data and UK GDPR
Gift Aid declarations contain personal data: the donor's name, home address, and taxpayer status. Charities must process this data under UK GDPR and the Data Protection Act 2018 with a lawful basis, typically legitimate interest or consent. Retain declarations only as long as HMRC requires (6 years after the last donation covered), then securely delete. For full guidance, see the Information Commissioner's Office.
Zeffy processes donor data in accordance with UK GDPR requirements. Charities using Zeffy for Gift Aid collection should confirm their own data-processing basis in their privacy notice.
UK tax-smart giving strategies
These are donor-side strategies to stretch the value of charitable giving. Speak to a UK accountant or tax adviser before acting on any of them.
Payroll Giving
Payroll Giving (also called Give As You Earn) is HMRC's workplace donation scheme. Donations come out of gross salary before Income Tax is applied, so the gift is effectively subsidised by tax relief at source:
A basic-rate (20%) taxpayer giving £10/month pays only £8 net.
A higher-rate (40%) taxpayer giving £10/month pays only £6 net.
There is no Gift Aid declaration needed because the relief has already been applied through payroll. The donation goes directly to the charity via an approved Payroll Giving agency.
Direct Debit is the dominant regular-giving mechanism for UK charities, accounting for around 31% of all UK charity donations. Payroll Giving sits alongside this as a highly tax-efficient route for employed donors.
Gifts to a registered charity in your Will are exempt from Inheritance Tax. Leaving 10% or more of your net estate to charity also reduces the Inheritance Tax rate on the remainder from 40% to 36%.
The CAF (Charities Aid Foundation) Charity Account is the closest UK equivalent to a donor-advised fund. Donors contribute once (claiming Gift Aid on that contribution), then recommend grants to individual charities over time. This is useful for donors who want to make a large Gift Aid-eligible gift in one tax year and distribute it to charities over several years.
One-year carry-back for higher-rate relief
Higher-rate and additional-rate donors who make a large gift can carry the Gift Aid claim back to the previous tax year, provided they file the current-year Self Assessment return before the previous-year deadline has passed. This can be valuable if the donor had a higher income in the previous year.
UK tax year and Gift Aid deadlines
Key dates for the UK tax year (6 April to 5 April):
Self Assessment online deadline: 31 January following the tax year end (paper deadline: 31 October).
Higher-rate carry-back deadline: the carry-back claim must be made before you file the current-year return. If you file early, you cannot carry back after filing.
Charity's Gift Aid claim window: 4 years from the end of the accounting period the donation falls in. A charity can claim on gifts made up to 4 years ago.
Gift Aid records retention: 6 years after the last donation covered by each declaration.
When does a gift count as "made"?
Cheques: the date the donor writes and posts the cheque, not the date the charity deposits it.
Card payments: the date the transaction is processed on the donor's card.
Standing orders and Direct Debits: the date the charity receives the funds.
Gifts of shares: the date beneficial ownership transfers to the charity.
Payroll Giving: the date the payroll deduction is processed.
The pattern across this whole guide: Gift Aid lives or dies on the paperwork. Charities need a valid declaration for every donor, declaration records retained for 6 years, and a year-end summary that higher-rate donors can use on their Self Assessment return.
Zeffy automates all of it. Every gift, online or recurring, triggers a Gift Aid declaration capture at checkout, stores the required HMRC details, and generates a donation acknowledgement the moment the gift is made. Charities get the donor records they need to submit via HMRC Charities Online, with no January scramble.
Zeffy is free for UK charities: no platform fee, no transaction fee, no card fee. Ever.
This article is educational, not tax advice. Consult a UK accountant or tax adviser for your specific situation.
Yes. The donor must have paid enough UK Income Tax or Capital Gains Tax in the tax year to cover the Gift Aid reclaim on their gift. For a £100 donation, the donor must have paid at least £25 in UK tax that year. If you are a non-taxpayer (for example, a student, someone on a low income, or a retiree whose income is below the personal allowance), do not tick the Gift Aid box. HMRC will recover any shortfall from you personally.
If a donor loses their declaration, the charity can ask them to sign a new one. A single declaration can cover all past and future gifts to the same charity, so a backdated replacement declaration is acceptable provided the charity notes in its records when the replacement was signed. The charity must keep the replacement for 6 years after the last donation it covers.
Many UK parent-teacher associations (PTAs) and Parent Friends Associations (PFAs) are registered charities or HMRC-recognised bodies. If the school's PTA has HMRC recognition and you sign a Gift Aid declaration, Gift Aid applies to donations (not to purchases at the school fete or payments for uniform). Check the PTA's status on the Charity Commission register or ask the PTA treasurer directly.
It depends. If you donate via GoFundMe UK to a registered charity's campaign, and the charity is HMRC-recognised, and you sign a Gift Aid declaration, the donation can be Gift Aid eligible. If you donate to an individual's personal crowdfunding campaign (even for a genuine hardship), Gift Aid does not apply because the recipient is not a charity.
The payment method does not affect Gift Aid eligibility. What matters is whether the receiving charity is HMRC-recognised and whether the donor has signed a valid Gift Aid declaration. PayPal's Giving Fund and some open-banking apps facilitate Gift Aid declarations at checkout; confirm with the specific platform before donating if you want to ensure your declaration is captured correctly.
No. HMRC recognition must be in place at the date the gift is received. A charity cannot retrospectively claim Gift Aid on donations that arrived before HMRC granted recognition. This makes it important to apply for HMRC recognition as soon as possible after Charity Commission (or OSCR or CCNI) registration, not as an afterthought. Once recognition is effective, the charity can claim on all eligible donations received from that date.
Registered charities are generally exempt from Income Tax and Corporation Tax on income and gains used for charitable purposes. This exemption covers donations, Gift Aid reclaims, investment income, and trading income that is used for the charity's primary purpose. VAT is a separate matter: charities are not automatically VAT-exempt, though a range of specific reliefs apply (for advertising, fuel and power, certain construction works, and donated goods). For VAT questions, the Charity Tax Group is the definitive independent technical reference.
Charities must keep Gift Aid declarations for at least 6 years after the last donation covered by that declaration (or 6 years after the declaration is cancelled or expires, whichever is later). Donors claiming higher-rate relief via Self Assessment should keep donation acknowledgements for at least 22 months after the end of the relevant tax year (this covers the Self Assessment filing deadline of 31 January and HMRC's enquiry window). Source: HMRC Chapter 3 Gift Aid detailed guidance.
Look for people who attend related events, follow relevant Facebook groups, or subscribe to aligned newsletters.These aren’t just potential donors—they’re your future advocates.
Look for people who attend related events, follow relevant Facebook groups, or subscribe to aligned newsletters.These aren’t just potential donors—they’re your future advocates.
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