The value of charitable donations has risen across England and Wales – driven by increased tax relief for charities and their donors. The news comes even as the number of donations declared on tax filings decreases – showing those still able to afford supporting a charity are even more determined to do so.
Charitable donations in the UK have bounced back from a year of decline, to equal their post-pandemic high. According to data released by His Majesty’s Revenues and Customs (HMRC), the total donations declared in self-assessments during 2023 had fallen to £4.0 billion. But last year, this rebounded 3% to £4.1 billion – significantly higher than the last reported pre-pandemic figure of 3.3 billion in 2019.
This is despite a smaller number of donors being represented by HMRC’s findings this time out. According to the UK tax body, £1.33 million people declared a donation in their self-assessment in 2023 – but this shrank by 2% to £1.31 million in 2024.
Source: UK Government
While the cost of living in the UK – which saw more than £2,000 wiped off the average household income amid a period of record inflation – might be pushing some consumers to hold back donations, it is clear that those who are still giving are determined to do more. In an economy where charities are increasingly under pressure to do more with less, that might offer organisations at least a small amount of breathing room.
Added to that, HMRC suggested that beyond individual donations, charities are also seeing relief rise. Accounting for gift aid, associated reliefs, business rates and stamp duty land tax, UK charities received more than £4.7 billion in reliefs – up from £4.5 billion for the previous year.
John Foskett, UK-based tax partner at leading audit, tax and consulting firm RSM, commented, “It is encouraging to see that payments under the is Gift Aid Small Donations Scheme also rose, returning to their pre Covid-19 pandemic level of £40m in the tax year ending April 2025, which we are hopeful forms a steady positive trend for the sector.”
Source: UK Government
However, not all the data pleased the tax consultant. Tax reliefs for charities and their donors increased by 5% year-on-year for the tax year to April 2025, with business rates relief and gift aid paid to charities up by 7% year-on-year. But with UK private schools set to lose their charitable status in 2025, the next tax year might see all these statistics drop considerably.
Foskett added, “The removal of business rates relief for independent schools from April 2025 will significantly impact this relief for the April 2026 tax year, reducing the single biggest relief for charities. There’s also continued concern that this charitable relief could be withdrawn more widely if government funding dictates further tightening in the autumn budget.”
While a drop in ‘charitable’ funding and tax relief relating to elite education might be more of a cosmetic drop in the figures, government cuts to charities devoted to helping the most vulnerable people in and out of the UK might indeed be on the cards. As the Labour administration looks to funnel 5% of GDP into its military, it is pushing ahead with unpopular slashes to social security – and has also decreased its international humanitarian and developmental aid budget from 0.5% of gross national income to 0.3% – a move which led some charities to accuse Prime Minister Keir Starmer of trying to “appease” far-right US President Donald Trump.