What Happens If You Gift Aid But Don’t Pay Tax?

This article aims to answer the question of what happens if someone uses the Gift Aid option to donate to charities but they don’t pay tax. While the key focus of the below content will remain on the eligibility criteria for Gift Aid, we will also explore alternative options for individuals intending to donate through Gift Aid.

What Happens If You Gift Aid But Don’t Pay Tax?

If you donate to a charity through Gift Aid but don’t pay tax, either the charity will have to repay the amount to HMRC or you will be asked to pay the differential amount to them.

How donating through Gift Aid works is that the intended charity can claim back an extra 25p for every £1 you give. It’s a government scheme that allows charities to boost the value of donations from UK taxpayers.

In most cases, donors choose to have their donations deducted through their incomes before their incomes are taxed under the PAYE system. If your income is not sufficient enough to be taxed, you may not be able to donate through Gift Aid.

If you wish to donate through Gift Aid, you should have paid the required amount of income tax (or capital gains tax; as the case may be) during the financial year in which you intend to donate. The minimum amount of tax paid in this case should be equal to the amount that the charity can reclaim after your donation. 

The charity will ask a donor to agree and sign a declaration of their tax-paying status when the donor expresses their intent to make a donation. You don’t have to declare the amount of tax that you pay in this declaration.

If you have not paid the required amount of tax, you will have to make up the differential amount in income tax to the HMRC. however, if you have not paid tax at all, you may not be able to donate through Gift Aid. even if you do, the charity will not benefit from tax relief.

That said, you should keep in mind that tax is not merely applicable to salaried income and also applies to investments, savings, pension and rental income. If you have been paying taxes for any of these sources of income, you can qualify for Gift Aid.

Can I Use Gift Aid In Any Other Way?

Yes, you can use Gift Aid to donate to charities in ways other than having the charitable amount deducted from your income. Some of these include the following:

  • When you visit a place such as a museum, zoo or heritage property, you can pay an additional amount (usually 10%) for your entry ticket. This is so, so that the charity may claim Gift Aid
  • If you choose to sponsor someone to participate in a charity event, the charity may be able to Gift Aid on your sponsorship
  • When you make donations of goods, the charity that you donate to may run a scheme according to which they can sell the donated items and the amount raised can be treated as a Gift Aid donation.

However, in all these cases, you are still required to make a declaration of being a taxpayer and will not be able to participate if you don’t pay taxes.

Can I Use Gift Aid If I Don’t Pay Tax But My Partner Does?

Yes, you can use Gift Aid if you don’t pay tax but your partner does. However, the below essential conditions need to be met in this case:

  • your partner is a UK taxpayer
  • your partner signs the tax declaration form for Gift Aid
  • you and your partner share a joint bank account

Your partner’s taxable income can be derived from any of the following sources to be acceptable for a Gift Aid donation:

  • salary or wages from a job
  • earnings from self-employment
  • a personal or occupational pension
  • bank or building society savings accounts
  • rental income
  • stocks and shares
  • UK and overseas investment dividends

For details regarding donations, you can call Shelter England at +443003301234.


The above discussion has helped to conclude that if you are not a taxpayer in the UK, you will not be able to donate to charities through Gift Aid. the only option available in this regard would be if you have a tax-paying partner and share a joint account with them, you may be able to donate through Gift Aid.


Giving to charity | Low Incomes Tax Reform Group

Tax relief when you donate to a charity: Gift Aid – GOV.UK

Gift Aid FAQs – Shelter England