Nearly half of charities raised significant income from Gift Aid as claims on donations and fundraising events attract tax relief at 20%, with £1.3bn claimed in 2021-22, down only slightly by 3% on the previous year.

The majority of charities (88%) claimed Gift Aid on income from individual gifts or donations, while nearly one in five (18%) claimed the tax relief on income from fundraising events, HMRC research into charity awareness of Gift Aid revealed.

There are 168,000 charities registered in the UK with reported income of £58.7bn. The main sources of income for charities in 2020-21 were individual gifts and donations (75%), fundraising events (60%) and Gift Aid (55%).

Charities wanted the process of managing their tax affairs to be easier with more detailed and accessible guidance from HMRC, improved software functions and automation of Gift Aid claim forms. Additionally, some charities reported that it was difficult to navigate HMRC webpages or to access support via telephone, with long waits for a response, and they wanted these processes to be improved.