Gift Aid Rate: 25% Top-Up, Higher Rate Relief, and Carry-Back

The Gift Aid rate is 25%: a UK charity can reclaim 25p from HMRC for every £1 you give, turning a £100 donation into £125 at no extra cost to you. That figure comes from the 20% basic rate of income tax, and it is confirmed at 20% for the 2026/27 tax year.¹ If you pay tax at 40% or 45%, you can reclaim more on top through your own tax return.

Where the 25% Figure Comes From

Gift Aid treats your donation as money you earned after paying 20% income tax. The charity works backward to the pre-tax amount and reclaims the tax portion from HMRC.²

Take a £100 donation. That £100 is 80% of the gross figure. Divide by 0.80 and you get £125. The remaining £25 is the 20% income tax already paid on that £125 of earnings, and it is what the charity claims back.³

A quick shortcut: multiply any donation by 0.25 to find the top-up. Give £40 and the charity claims £10. Give £500 and it claims £125. The ratio has not moved for years because the basic rate has stayed at 20%.¹

You Have to Have Paid Enough Tax

You qualify as a Gift Aid donor if you pay UK Income Tax or Capital Gains Tax. The rule that catches people out: your tax bill for the year must be at least as large as the total Gift Aid claimed by every charity you give to combined. The tax year runs from 6 April to 5 April.⁴

If you have not paid enough tax to cover what the charities reclaim, HMRC will come to you for the shortfall. This is easy to miss when income falls partway through the year, or when several large donations stack up. Before ticking Gift Aid, add up the donations you plan to make that year and check your Income Tax and Capital Gains Tax bill is at least that much.⁵

What Higher and Additional Rate Taxpayers Get Back

The charity only ever claims the basic 20%. If you pay tax at 40% or 45%, the difference between your rate and 20% is yours to reclaim personally.²

Same £100 donation, gross value £125. At the 40% rate, you claim 20% of £125, which is a personal rebate of £25. Your donation effectively cost you £75.²

At the 45% additional rate the gap is 25%, so you reclaim 25% of £125, which is £31.25. Your real cost drops to £68.75, and the charity still receives £125.³

You claim this relief through Self Assessment, in the section for charitable donations. If you are not in Self Assessment, contact HMRC and ask them to adjust your PAYE tax code. Either way, you have to ask; the higher-rate relief is not automatic and disappears if you do not claim it.²

If You Pay Scottish Income Tax

Scotland has its own income tax bands, including an intermediate rate of 21% that does not exist elsewhere in the UK. The charity still claims the standard 25p per £1 based on the UK-wide 20% basic rate, whichever Scottish band you sit in. If you pay Scottish tax above 20%, you can reclaim the difference personally, just as higher-rate taxpayers elsewhere do. An intermediate-rate Scottish taxpayer claiming a 1% difference will get a smaller rebate than a 40% taxpayer, but the mechanism is the same.¹

Gift Aid Also Cuts Your Adjusted Net Income

Gift Aid does more than trigger a rebate. It lowers your adjusted net income, the figure HMRC uses to work out whether you lose your Personal Allowance or owe the High Income Child Benefit Charge. Every £1 donated is deducted as £1.25 (the grossed-up amount) from that income figure.⁶

Two thresholds matter here. The Personal Allowance starts shrinking once adjusted net income passes £100,000 and is gone entirely at £125,140. A donation timed to bring your income back under £100,000 preserves the full allowance. The High Income Child Benefit Charge starts at £60,000; a Gift Aid donation can pull your income under that line too.⁶

Take an income of £105,000. A £4,000 Gift Aid donation grosses up to £5,000, bringing adjusted net income to £100,000 and saving the £2,500 of Personal Allowance you would otherwise lose. The tax saved on the restored allowance is on top of the higher-rate relief on the donation itself.

What Does Not Qualify

Gift Aid only works on cash donations where you get nothing significant back. Payments for raffle tickets, event admission, goods, school fees, or services are not gifts and cannot be claimed. Donations from companies and anonymous bucket or tin collections also fall outside the scheme.⁵

The charity also needs a Gift Aid declaration from you before it can claim. That is a statement confirming you are a UK taxpayer and authorising the reclaim. It must carry your full name, home address, the charity’s name, and details of which donations it covers, and it must warn you about the personal liability for any tax shortfall. Declarations can be written, electronic, or spoken, and one declaration can cover all your future donations to the same charity.⁷

Carrying a Donation Back to the Previous Year

If you donate after 6 April but before filing your Self Assessment return for the year just ended, you can elect to treat that donation as made in the earlier year. This is useful when your tax bill was higher last year, or when you need to cover a shortfall on last year’s Gift Aid claims.⁸

The election has to sit on your original return for the earlier year. HMRC will not accept a carry-back claim on an amended return. You also need to have paid enough Income Tax or Capital Gains Tax in that earlier year to cover what the charity reclaims on the carried-back donation.⁸

1
GOV.UK. Rates and Thresholds for Employers 2026 to 2027
2
GOV.UK. Tax Relief When You Donate to a Charity – Gift Aid
3
GOV.UK. Income Tax Rates and Personal Allowances
4
GOV.UK. Self Assessment Tax Returns – Deadlines
5
GOV.UK. Chapter 3 – Gift Aid
6
GOV.UK. Personal Allowances – Adjusted Net Income
7
GOV.UK. Claiming Gift Aid as a Charity or CASC – Gift Aid Declarations
8
GOV.UK. HS342 Charitable Giving (2024)