Charities could be missing out on nearly £1bn a year because people are not claiming tax relief on their donations, a finance firm has warned.
Research by Handelsbanken Wealth Management & Asset Management, which draws on public polling and Charity Commission data, found that 60 per cent of the public were not claiming tax relief on their donations, apart from when giving through their salaries.
These donations are thought to be worth about £4.7bn, meaning that unclaimed tax relief at 20 per cent would come to about £940m, the research says.
Of those who do claim relief, pollsters found that 29 per cent did so through Gift Aid during their tax self-assessment, while one in 10 asked HM Revenue & Customs to amend their tax code.
A further 2 per cent received help from a financial adviser.
The research showed that 22 per cent of respondents said they planned to leave money to charity in their will, with the average total being £2,200. Handelsbanken said this could add up to £26.5bn for the sector overall.
The research also found that people between 18 and 34 years old were the most generous givers, donating twice the national average to charity every year.
Only 18 per cent of those surveyed were aware of the potential inheritance tax savings when donating larger amounts of their estate to charity.
Mark Collins, head of tax at Handelsbanken Wealth Management & Asset Management, said: “Charity donors will want to see the organisations they support receiving the full benefit of donations, which should include claiming the tax relief, whether it is through Gift Aid or consulting a financial planner.”
The firm surveyed more than 2,000 people in the UK on their approach to charitable giving, working with the polling firm Opinium.