Tax relief for charitable donations is available in the UK. Individuals can benefit through Gift Aid, Payroll Giving, gifts of shares or land, and charitable gifts in their will. Companies can usually claim corporation tax relief for charitable donations made to qualifying UK charities.
However, the exact tax treatment depends on how the donation is made and whether HMRC conditions are met.
So, if you are looking into tax relief for charitable donations, it is worth knowing exactly what you can claim before you complete your tax return.
And if you’d rather hand the stress over to experts who know tax relief for charitable donations inside out, working with our specialist charity accountants can ensure you maximise your tax savings while keeping everything fully compliant.
What Is Tax Relief For Charitable Donations?
Tax relief for charitable donations is a set of HMRC rules that encourages people and businesses to support charities. The charity may receive more from your donation, or you may pay less tax. This entirely depends on how you donate.
Remember that there is not one single relief. Which relief you get depends on how you give to charity:
- Gift Aid, for individuals
- Payroll giving, through your employer
- Gifts of shares or land
- Corporation tax relief, for companies
- Inheritance tax relief, for gifts in a will
Mostly, Gift Aid is the common form of tax relief for charitable donations by individuals.
Can I Claim Tax Relief On Charity Donations?
Yes, you absolutely can. If you’re a UK taxpayer and the charity (or community amateur sports club) is registered in the UK, you can definitely claim tax relief for charitable donations.
As stated above, the most common route is Gift Aid.
Here is how it works:
You make a donation from money that has already been taxed and confirm that you are a UK taxpayer. The charity can then reclaim 25p from HMRC for every £1 donated. So, a £100 Gift Aid donation is worth £125 to the charity. It does not cost you anything extra.
| Your tax rate (England, Wales, NI) | You give | Charity gets | Extra relief you claim | Real cost to you |
| Basic, 20% | £80 | £100 | £0 | £80 |
| Higher, 40% | £80 | £100 | £20 | £60 |
| Additional, 45% | £80 | £100 | £25 | £55 |
Scotland has its own rates for 2026/27 (19%, 20%, 21%, 42%, 45% and 48%), so the maths there shifts a little.
However, you need to have paid enough income tax or capital gains tax in the year to cover what charities reclaim. If you do not pay enough tax, HMRC can ask you to pay the difference. It mostly affects people on low incomes.
Also remember that HMRC tax relief for charitable donations only covers registered charities and CASCs. So a crowdfunding page for a friend doesn’t count.
How To Claim Tax Relief On Charity Donations?
The way you handle claiming tax relief for charitable donations depends on your personal tax bracket and how you choose to donate.
If You are a Basic Rate Taxpayer (20%)
If you pay the basic rate of 20% tax, you do not need to claim anything from HMRC directly. You simply sign a Gift Aid declaration form or tick the Gift Aid box when donating online.
The charity reclaims 20% basic rate tax directly from the government. This boosts your donation by 25p for every £1 you give (e.g., a £100 donation turns into £125 for the charity).
Note: You must ensure you have paid enough Income Tax or Capital Gains Tax in that year to cover the amount the charity will reclaim.
If You Are A Higher (40%) or Additional Rate (45%) Taxpayer
Things change if you are a higher rate (40%) or additional rate (45%) taxpayer. The charity still only gets the basic 20% rate. This means you can personally claim back the difference between your higher tax rate and the basic rate.
Here is an example. If you give £100 to a charity, they grow it to £125 using basic Gift Aid. As a 40% taxpayer, you can claim back 20% of that total £125 gross amount. That is £25 back in your pocket. As a result, the actual cost of your donation becomes £75.
You can personally reclaim the remaining 20% to 25% tax relief using one of two methods:
- Self Assessment Tax Return: Enter the total actual cash amount you paid to the charity in the “Charitable giving” section of your annual tax return. HMRC’s system will automatically gross it up and calculate your higher or additional-rate tax relief.
- Contact HMRC Directly: If you do not fill out a Self Assessment return, you can call the HMRC Helpline or use your HMRC online account to report your donations. HMRC will adjust your PAYE tax code. Hence, you will pay less income tax from your salary moving forward.
Are Charitable Donations Tax-Deductible for UK Companies?
In many cases, yes. But companies do not use Gift Aid. Instead, they deduct the full value of the donation from their business profits before calculating tax. This naturally reduces the final business tax bill.
| Company Taxable Profits | 2026/27 Corporation Tax Rate | Tax Saving on a £1,000 Donation |
| £50,000 or less | 19% (Small Profits Rate) | £190 |
| £50,001 to £250,000 | Sliding Scale (Marginal Relief) | Up to £265 |
| Over £250,000 | 25% (Main Rate) | £250 |
So, tax relief for charitable donations by companies can make a massive difference. This is especially if your business lands in the marginal relief zone where the effective tax rate hits up to 26.5%. Therefore, keeping an eye on these thresholds can help you keep your business tax-efficient.
Remember that from April 2026 the rules on “tainted” donations are tighter. If the donor or someone connected gets a benefit back, relief can be lost. Paying for advertising or sponsorship isn’t a donation either, though it may be a normal business expense.
So, do companies get tax relief for charitable donations? Yes, they can, but certain conditions need to be met. For corporation tax relief for charitable donations, the gift should be a genuine donation rather than payment for advertising or another business service.
What About Inheritance Tax Relief for Charitable Donations?
Inheritance Tax relief for charitable donations can reduce or eliminate the tax bill on your estate. Any money, property, or assets left to a registered UK charity in your will are 100% exempt from Inheritance Tax.
Furthermore, making a significant gift can lower the tax rate applied to the remainder of your taxable estate
When a gift is left to charity in a will:
- The charitable gift is generally exempt from Inheritance Tax.
- If at least 10% of the net estate is left to charity, the Inheritance Tax rate applying to the remainder of the estate may reduce from 40% to 36%.
For individuals considering estate planning, charitable giving can therefore deliver both personal and tax advantages.
How Accotax Can Help
At Accotax, our specialist charity accountants can check whether your donations are set up properly and make sure your Self Assessment return picks up every bit of relief you’re owed.
If you own a company, we handle the corporation tax side too, so the deduction is claimed in the right period.
Get in touch today, and we’ll go through your charitable donations and tax position with you, so you can claim the relief you’re actually entitled to.
The Bottom line
Tax relief for charitable donations can work differently depending on whether you are an individual, sole trader or limited company.
For individuals, Gift Aid is usually the starting point. Higher-rate taxpayers may be able to claim extra relief. Companies have separate rules for deducting qualifying donations from profits.
And if charitable giving is part of your estate planning, leaving at least 10% of the relevant estate to charity may reduce the Inheritance Tax rate to 36%.
The key is not to assume that every donation gets the same tax treatment.
Check how you gave, who gave it and what was received in return before making the claim. You can also hire specialist accountants to handle it all for you.
Looking for more UK tax and accounting guidance? Explore our sitemap for more practical guides, tax updates and helpful resources.
Disclaimer: All the information provided in this article on “Tax Relief for Charitable Donations: Complete UK Guide 2026/27“, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.
