Taxing stuff: six things the latest HMRC data tells us about giving

Introduction

HMRC publishes its charity tax stats in June or July each year. They are a fascinating treasure trove of data about the UK’s giving habits (for the tax year ending April 2026) and welcome up-to-date and accurate information about the public’s giving habits. So what do they tell us? Here are six things I spotted. More on the demographics and geography of giving in a future blog.

1. There are four big beasts of charity tax – basic rate gift aid, business rates relief, inheritance tax relief and higher rate tax relief on donations.

Gift Aid, business rates relief, higher rate tax relief and inheritance tax relief are the four big beasts of tax relief. Together, they make up 94% of all the charity tax reliefs. The first two go to charities, and the last two go to the individual.

2. Non-domestic rates dwarf gift aid by nearly £1 billion

By far the biggest of the tax reliefs is business rates relief (or non-domestic rates relief to give it its proper term) on property. This was worth £2.8 billion in the last tax year. This is almost exactly a billion more than the basic rate gift aid at £1.8 billion.

3. Higher rate tax relief on donations and inheritance shows strong growth – doubling or more in a decade

The two biggest growing areas over the last 10 years are inheritance tax relief and higher rate income tax relief. The former is where less tax is paid on an estate because donations are paid to charity, and the latter is where a higher rate taxpayer gets relief on the higher rate portion of a donation.

Ten years ago (2017),  inheritance relief was worth £530 million; now it's worth £1.28 billion or a growth of over 140%. Higher rate relief (where a donation to charity reduces the higher rates of income tax paid) has gone from £460 million a decade ago to £920 million now—a growth of 100%.

4. Gift Aid and business rates show medium growth – of around 40% over a decade

Both of the previous two reliefs go back to the individual. Basic rate gift aid and business rates go to the charity. The former adds 25% to any donation, and the latter dramatically reduces the business rates charities pay on buildings (such as charity shops). Basic rate gift aid has grown from £1.27 billion a decade ago to £1.88 billion now – a growth of 48%. Business rates have grown similarly by 40% in a decade.

5. Payroll giving is static and small – not growing in a decade.

I am on record as calling payroll giving the British Leyland of giving methods (sorry, you need to be a certain age to get that reference). But basically, the tax relief was £40 million ten years ago and is £40 million today. So no growth at all.

5. Gifts of shares and property are pretty small and have shown minimal growth

If you give shares or property, you can get tax relief, but the reality is that the total tax relief is tiny (just £100 million now) and was £70 million a decade ago. Figures that aren’t going to change the fundraising landscape much.

6. And the Gift Aid small donations scheme is still pretty small

The Gift Aid Small Donations Scheme is designed to help charities get Gift Aid on donations of small change. It's only worth £40 million in relief in the latest tax year, down from £30 million a decade ago, in 2017. The problem is twofold. We use change less and less, and the scheme is capped for each charity and quite clunky. And that small amount of money reflects that.

What do these figures tell us about giving patterns?

Over the last decade (2017 to 2026), the balance is shifting towards money to the individual, away from money to charity. In 2017, individuals got 24% of the total tax relief; now it's 32%. More rich people are giving more. How can we make the tax system encourage (rich) people to give even more? That is the story for another blog, as is the demographics of what HMRC data shows us about how giving varies by age, gender and geography.