The report, Analysis of Giving Through Gift Aid, examined trends in the use of Gift Aid since 2000 when all charitable donations by UK tax-payers became potentially eligible for tax-relief. Since the launch of Gift Aid in 1990, the value of donations through the scheme has grown an average of 11% a year, with donations since 2000 accounting for £12.2bn, the report found. Of the £2.8bn received by charities in 2004/5, £625 million was in the form of tax-relief paid back by government.

Commenting on the report, Cathy Pharoah, research director at CAF, said: “It is very gratifying to see so many more people taking advantage of the government’s generous tax-breaks on giving. The UK now has one of the most favourable tax regimes for charitable giving in the world. However, the public could still seriously increase charities’ income through ensuring that much more of their gifts are made tax-efficiently.”

The report found that about one-third of the value of all donations is made through Gift Aid, with a wider spectrum of people giving tax-efficiently, including younger and less wealthy donors. Pharoah believes a further third of existing giving could be converted to Gift Aid. “To make all giving tax-efficient is a major challenge for the sector because much fundraising is still done in ways which do not easily lend themselves to conversion,” she added.

For a copy of the report, visit www.cafonline.org/research/giftaid