He provided some figures to show how the principle works
Martin Lewis has explained a rule that could allow certain earners to claim back some tax. In a recent episode of his BBC podcast looking at the show’s highlights from the past year of 2025, the expert spoke about how some people could claim back 20 per cent back.
The rules apply when making a donation to a charity through Gift Aid. This scheme allows a charity to effectively claim back the basic rate tax you have paid on the amount, boosting your donation by 20 percent. However, if you are a higher rate taxpayer in England, Wales and Northern Ireland, with an income above £50,270 a year, as your earnings above this level are taxed at 40 percent, you yourself can claim back the 20 percent.
Mr Lewis explained: “Interestingly, you can claim the extra 20 percent back. So when you are a higher rate taxpayer, they get the 20 per cent and if you’ve made a Gift Aid donation, you can claim the other amount of tax back, through your self assessment tax return.”
He urged people who get someone else to do their tax return for them, to make sure they give them details of their Gift Aid donations, so they can claim back the 20 per cent.
Mr Lewis explained how you could factor in this rule when giving to charity, to effectively increase your donation while not paying more. He said: “As I strongly support charities, arguably if you are happy to donate £100 of your money as a higher rate taxpayer, donate £133, then the charity gets £166, you can reclaim £33, and it only cost you £100, only if you are earning that much above the 40 percent limit though.”
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Mr Lewis further explained: “The key is in order to reclaim the tax at that higher rate, you have to have paid that much tax at that higher rate.” He gave the example that if you were only just into the higher rate threshold and had only paid £10 in tax at this rate, you can only claim up to this amount back from a Gift Aid donation.
In summary of how the rule works, Mr Lewis said: “Generally, it does mean if you are a higher rate taxpayer, you can actually get away with giving more than you thought you would to charity, because you can then claim some of it back.”
If you are on the additional rate for income tax, paying 45 percent, you can claim back 25 percent from your Gift Aid donations.
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