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How to claim extra tax back if you give to charity and pay higher-rate tax

Part of a HMRC statement that says HMRC owes you

If you pay tax above the basic rate and you add Gift Aid to donations you make to charity, HMRC may owe you money.

Here is the bit most people do not know. When you tick the Gift Aid box, the charity gets extra money from HMRC. That part costs you nothing. But if you pay tax at 40% or 45%, there is a second part of money that belongs to you, not the charity. HMRC will not send it unless you ask for it.

You can claim for the last four years, not just this one. So if you have never done this before, it is worth ten minutes to check.

Do you pay more than the basic rate of tax?

You pay the higher rate once you earn over a certain amount. In England, Wales and Northern Ireland, that is currently £50,270 a year. In Scotland, the amount is different. This changes most years, so check the current figure on gov.uk (opens in new tab) rather than relying on an older number.

An easy way to check is to look at your P60, the form your employer gives you each year. If your total pay on it is above the amount for your area, you are likely a higher-rate taxpayer.

Checking this way works best if you have one job. If you also have income from renting out property, or interest from savings above your tax-free allowance, add everything together first.

How much you can claim back

The charity’s money and your money are two different things.

The charity gets 25p extra for every £1 you give. So your £100 becomes £125 for them. That happens automatically, regardless of the tax you pay.

Your own money is on top of that:

  • If you pay 40% tax, you can claim back £25 for every £100 you gave.
  • If you pay 45% tax, you can claim back £31.25 for every £100 you gave.

People often think everyone gets the same amount back. They do not. If you pay the top rate of tax and only claim 25%, you are leaving money on the table.

An example

Say you pay 40% tax and give £100 a month to charity (£1,200 over the year). The charity turns that into £1,500 and gets their extra money from HMRC. You can separately claim back £300 for the year.

If you pay 45% tax and gave the same amount, you could claim back £375 instead.

Do this for the last four years and that is over £1,000 that could be sitting with HMRC right now, waiting for you to ask for it.

How to claim it: five simple steps

1. Check if you qualify

Compare what you earned to the higher-rate amount on gov.uk (opens in new tab) . If you earned over that amount in any of the last four years, you can claim for those years too.

2. Gather up your donations

  • Check your Swiftaid statement.
  • Search your email for charity receipts.
  • Check any charity shop paperwork if you have donated bags of clothes or other items.

3. Tell HMRC

There are two ways to do this:

4. Keep your paperwork

How long you keep records depends on how you claim:

  • If you fill in a tax return: keep your records for at least 22 months after the end of the tax year, as long as you file on time. See HMRC record-keeping guidance (opens in new tab) .
  • If you are self-employed or rent out property: keep records for five years after the 31 January filing deadline. See HMRC self-employed record rules (opens in new tab) .
  • If you claim by phone or letter without filing a return: HMRC does not set a fixed time limit for this route, but it is sensible to keep donation records for a similar period in case they follow up.

5. Set a yearly reminder

The tax year ends on 5 April, and Self Assessment returns are due by 31 January. Either date is a good time to check you have claimed everything you are owed. A simple reminder every April keeps it easy. See Self Assessment deadlines (opens in new tab) .

Please note: We do not provide tax, legal or accounting advice. This article is for informational purposes only. Tax rules can change, so always check gov.uk (opens in new tab) for the latest information, or ask an accountant about your own circumstances.

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Team Swiftaid
Aug 15, 2022

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