Charities and their donors have benefitted from a significant year-on-year increase in tax relief, with the 2022/23 total hitting almost £6bn.
The sum includes a 19 per cent rise in Gift Aid, with HM Revenue & Customs paying charities £1.6bn in the last financial year.
But there are concerns about payroll giving, as the total given and the number of people taking part fell significantly.
The latest figure saw 516,000 giving a total of £128m direct from their wages, down from 545,000 giving £137m in 2021/22 and 591,000 giving £132m in 2020/21.
Philippa Cornish, head of corporate clients at the Charities Aid Foundation, said: “It’s concerning to see a sustained fall in the number of people participating in payroll giving schemes.
“Give As You Earn is easy, tax effective and flexible and gives charities a regular income that many rely on. Employers should see payroll giving as an important part of their employee value proposition and a powerful way for their people to make a positive impact in their communities.”
All of the figures are revealed in HMRC’s annual charity tax relief statistics publication.
It reveals that the total of £6bn of tax reliefs in 2022/23 includes £4.3bn for charities and £1.7bn for donors, both up 8 per cent year-on-year.
HMRC said much of the 19 per cent increase in Gift Aid came from “existing charities increasing the value of their claims”.
It said 190 charities received £1m or more in Gift Aid, up 27 per cent.
It added: “A smaller part of the increase was due to HMRC putting on hold more claims than usual in March 2022 for extra risk assessment. Most affected claims were paid in April and May 2023 and these now appear in the data for tax year ending April 2023.”
Charity rates relief, which allows third sector organisations to claim an 80 per cent reduction in business rates, is the largest single source of tax relief granted directly to charities.
HMRC said: “In the tax year ending April 2023 it is forecast to be just under £2.4bn, about level with the previous year.”
Inheritance tax relief for charitable donations was estimated to be £790m, up 1 per cent, while the provisional forecast of higher rate relief is £740m, an increase of 14 per cent year-on-year.
The total number of organisations benefiting from Gift Aid fell by 2 per cent, to just over 64,000.
The number of individuals declaring a donation via self assessment increased by 2 per cent to 1.27 million donors. The total value of donations increased by 14 per cent to £4bn.