Tax reliefs for charities in 2023/24 were £4.46bn, up 3 per cent year on year, new figures show.

HM Revenue & Customs’ latest annual update of UK charity tax relief statistics, published today, shows total tax reliefs for UK charities have increased every year since 2022.

Overall, tax reliefs for charities and donors last year were more than £6bn, a 3 per cent year-on-year increase.

This was split between £4.46bn for charities and £1.57bn for donors.

Charities received £1.6bn in Gift Aid in the year to April 2024, the same figure as the previous year.

HM Revenue & Customs said there was a “small underlying upward trend” in Gift Aid figures, despite numbers remaining steady.

“The difference between the payments and the underlying trend is that a small proportion of payments were slightly delayed from early 2022, causing the level of payments in the year ending April 2023 to be a little higher than we would otherwise expect,” it said.

Slightly more than half of the value of Gift Aid payments went to charities with an annual income of less than £1m, HMRC said.

Gift Aid payments have increased by almost 20 per cent in the past five years.

Charities receive a mandatory 80 per cent reduction in business rates but some local authorities increase this by providing discretionary relief on any or all of the remainder. 

HMRC said the discretionary relief total was forecast to be £2.56bn in the year to April, 6 per cent higher than in the previous year.

“This relief is fairly stable in recent years and continues to be the largest single source of tax relief granted directly to charities,” it said.

This is set to change following the government’s announcement of its plan to scrap business rates relief exemptions for independent charitable schools in England from April.

The amount claimed under the Gift Aid Small Donations Scheme, which allows charities to claim a Gift Aid-like payment on a limited amount of small donations without accompanying paperwork, remained flat at £30m in 2023/24.