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Charity tax statistics for 2018/19 published by HMRC.

HM Revenue and Customs have published their updated statistics on Gift Aid and other tax reliefs covering the 2018/19 tax year. What does this say about the sector? 

The statistics

Tax reliefs for charities totalled £3.79bn in 2018/19 – an increase of 5% from the previous tax year which is primarily driven by a £90m increase in Gift Aid relief claimed by charities. The largest relief continues to be Business Rates relief, increasing by £60m in the tax year.

After a number of years of static movements in Gift Aid relief (including the Gift Aid Small Donations Scheme (GASDS)), there has been a promising increase of 7% in relief for charities to £1.35bn from Gift Aid. The relief from GASDS has increased 33% to £40m. Tax reliefs for individuals on charitable donations have increased, but at a lesser rate, with a total increase of only 2% to a total of £1.49bn. 

The progress on Gift Aid is encouraging, especially following the beneficial changes introduced to the Gift Aid system over the last two years such as increased flexibility to donor intermediaries and broadening of the GASDS from £5,000 to £8,000 per charity or community building. There were claims from 73,050 charities, which is up by 850 on the previous tax year. 

What does this mean?

Further developments, which took effect in April 2019 (such as an increase in the maximum donation a charity may claim a Gift Aid top-up on under the GASDS to £30 and a relaxation of paperwork regarding the Retail Gift Aid scheme) might help increase the take-up of Gift Aid. HMRC estimates that £560m of Gift Aid is not being claimed each year, perhaps due to charities being too cautious and missing out on valid Gift Aid claims. We believe there continue to be instances to increase the tax relief obtained on donations by identifying opportunities and making actual and potential donors aware of the tax reliefs and their benefits. 

HMRC’s full publication is available here.

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Our dedicated not-for-profit tax team advises all kinds of organisations. We work closely with charities, religious institutes, academies and schools, further and higher education organisations, INGOs, membership organisations and social businesses.

Take advantage of our sector experience to make sure you’re claiming all relevant tax reliefs and exemptions. Then enjoy directing the greatest possible funds towards the causes you care about.

Our tax and audit specialists work as one team and have trained as charity experts from day one. So you can count on regular communication, industry insights and an annual charity tax update after the Chancellor’s Budget. We also offer tax update seminars and bespoke fundraising workshops to help you keep up to date with the latest information.

Tax advice to help charities and their trustees

  • Review use of Gift Aid and other tax-efficient ways to boost income
  • Review group structures for tax efficiency and set up tax-efficient trading subsidiaries
  • Assess tax consequences of new contracts and agreements
  • Review VAT exemptions
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  • Guidance on property transactions 
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We also help charities, trusts and organisations use Blackbaud Grantmaking™ software to make and monitor grants and streamline their admin. To stay compliant and make the most of your resources, learn about grant management.

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