Gift Aid has helped generate more than £60bn in the 25 years since the policy was introduced, according to new figures from the Charities Aid Foundation.

CAF’s analysis shows the £60bn includes more than £12.3bn in tax relief. Charities will claim an estimated £1.2bn in tax relief through the scheme this year alone, CAF said, representing around 6 per cent of the voluntary income received by the sector.

Gift Aid enables charities and Community Amateur Sports Clubs to reclaim the basic rate of tax on donations from UK taxpayers at no extra cost to the donor, increasing the value of gifts to charities by 25p in the pound.

Introduced by then Chancellor Sir John Major in 1990, the scheme was expanded under Gordon Brown 10 years later when the lower limit was scrapped. CAF said the overall growth rate for Gift Aid receipts since then has been 14 per cent a year, hitting £1bn for the first time in the year 2011/12.

CAF chief executive John Low said Gift Aid is one of the best things government has done for charities.

“Britain is one of the world’s most generous countries and it is fitting that we have the world’s greatest charitable tax relief,” he said. “Our mission now is to encourage even more people to use Gift Aid so charities can reclaim their tax on donations.”

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