Gift Aid lets a charity claim an extra 25p from HMRC for every £1 you donate, as long as you have paid enough UK income tax or Capital Gains Tax to cover it. If you pay tax at 40% or 45%, you can also claim extra relief for yourself through your Self Assessment return. Donations also reduce your adjusted net income, which can help you keep your Personal Allowance above £100,000 and cut the High Income Child Benefit Charge.

Many higher earners in Bolton tick the box on the donation form and stop there, leaving tax relief unclaimed. This guide explains how the relief works for 2026/27, how to claim the higher-rate element, the carry-back option and how donations can save tax in the £100,000 trap.

How Gift Aid works

When you donate under the scheme, your donation is treated as if basic-rate tax of 20% has already been taken off it. The charity claims that tax back from HMRC.

You donate	Charity claims from HMRC	Charity receives in total
£10	£2.50	£12.50
£100	£25	£125
£1,000	£250	£1,250
£4,000	£1,000	£5,000

The £125 received from a £100 donation is called the grossed-up amount. It is the figure used for all the other reliefs below.

Conditions for claiming

• You must make a declaration for each charity or community amateur sports club you give to. One declaration can cover past and future donations.
• You must have paid enough income tax or Capital Gains Tax in the tax year to cover the 25p per £1 the charity claims. In practice, your donations should not exceed four times the tax you paid that year.
• If the charity reclaims more tax than you paid, HMRC can ask you to pay the difference.
• Tell the charity if you stop paying enough tax, for example after retiring or if your income drops.

Gift Aid relief for higher and additional rate taxpayers

The charity only reclaims basic-rate tax. If you pay tax at a higher rate, you can claim the difference yourself. HMRC gives this relief by extending your basic-rate band by the grossed-up donation, so more of your income is taxed at 20% instead of 40% or 45%.

Your tax rate	Extra relief you can claim	On a £100 donation
Basic rate (20%)	None	£0
Higher rate (40%)	20% of the grossed-up amount	£25
Additional rate (45%)	25% of the grossed-up amount	£31.25

So a higher-rate taxpayer giving £100 costs the charity nothing, gives the charity £125, and costs the donor £75 after relief. You claim through your Self Assessment return, or by asking HMRC to adjust your tax code if you do not file one.

Gift Aid and the £100,000 tax trap

Your Personal Allowance of £12,570 falls by £1 for every £2 of adjusted net income above £100,000, and is lost completely at £125,140. Gift Aid donations reduce your adjusted net income by the grossed-up amount, so £1 donated reduces it by £1.25.

This means donations made in the £100,000 to £125,140 band can attract tax relief of up to 60% overall. Our guide to income tax bands for 2026/27 explains the trap in more detail.

Worked example: donating at £110,000

Priya is a consultant in Bolton earning £110,000 in 2026/27. She donates £4,000 to a local hospice and signs a declaration.

	No donation	£4,000 donation
Adjusted net income	£110,000	£105,000
Personal Allowance	£7,570	£10,070
Basic-rate band	£37,700	£42,700
Income tax	£33,432	£31,432
Tax saving		£2,000

The hospice receives £5,000, and Priya’s tax bill falls by £2,000. Her £4,000 donation costs her £2,000 in real terms. The saving comes partly from the extended basic-rate band (£1,000) and partly from restoring £2,500 of her Personal Allowance (£1,000).

These figures assume England, Wales or Northern Ireland rates, no other income and no pension contributions. They have been checked against 2026/27 bands.

Gift Aid and the High Income Child Benefit Charge

The High Income Child Benefit Charge applies when adjusted net income is over £60,000. You repay 1% of your Child Benefit for every £200 of income above that, and all of it once your income reaches £80,000.

Because charitable donations reduce adjusted net income, a parent earning £68,000 who donates £1,600 (£2,000 grossed up) brings their income down to £66,000. The charge falls from 40% to 30% of the Child Benefit received, on top of the higher-rate relief on the donation itself. Pension contributions work in the same way, and our guide to pension tax changes covers the limits.

Carrying back donations to the previous year

You can ask for donations made in the current tax year to be treated as if they were made in the previous year. This is useful if you paid higher-rate tax last year but will not this year, or if you simply want the relief sooner.

• The claim is made on your previous year’s Self Assessment return.
• The return must be filed by the normal deadline: 31 October on paper or 31 January online. You cannot carry back on a late return.
• Your combined donations for both years must not exceed four times the tax you paid in the previous year.

For example, a Bolton landlord who donates in December 2026 can treat the gift as made in 2025/26, provided their 2025/26 return is filed online by 31 January 2027. See our Self Assessment deadline checklist for key dates.

Donations by sole traders and companies

Sole traders and partners give in the same way as any other individual, with the relief claimed on their personal return rather than as a business expense.

Limited companies do not use Gift Aid. Instead, a company deducts qualifying charitable donations from its total profits before Corporation Tax is worked out. Qualifying gifts include money, equipment or trading stock, land, property and shares in other companies. Donations to charity are a useful option for directors to review as part of year-end tax planning.

How to claim your tax relief

1. Make sure you have signed a declaration with each charity.
2. Keep a record of every donation, including the date, amount and charity.
3. Enter the total of your donations in the charitable giving section of your Self Assessment return.
4. Include any amount you want to carry back to the previous year.
5. If you do not file a return, contact HMRC to claim by phone (for claims of £5,000 or less) or in writing, or ask for your tax code to be adjusted.

Frequently asked questions

Make the most of your charitable giving

Gift Aid is one of the simplest reliefs to claim, yet it is often missed on tax returns. Cangaf’s ACCA-qualified team in Bolton can check your donations are claimed correctly, use carry-back where it helps and plan giving around the £100,000 and Child Benefit thresholds. Get a fixed-fee quote for your tax return today.

Official guidance: Tax relief when you donate to a charity: Gift Aid, Adjusted net income, High Income Child Benefit Charge and Tax relief when your limited company gives to charity.