The Government is committed to supporting charities through Gift Aid; Gift Aid claimed by charities was worth around £1.3billion in 2018-19. Gift Aid already results in full tax relief on the tax paid on donations, with basic rate relief being claimed by the charity and higher rate relief being claimed by the taxpayer where relevant. Increasing the rate at which Gift Aid is paid would break the link with the basic rate of Income Tax paid on qualifying donations. Additionally, less than 20% of UK charities claim Gift Aid, so any increased payments linked to this tax relief would only benefit a small proportion of charities, with most being paid to a very small number of the very largest charities.
There is ongoing work between the Government and charities to improve eligible Gift Aid take-up and ensure that Gift Aid is fit for the future, and we understand the need to raise awareness among charities and donors of the benefits of Gift Aid.