Section 426 of the Income Tax Act 2007 lets you elect to treat a Gift Aid donation made in the current tax year as if it had been made in the previous one. For donations made since 6 April 2026, that means claiming them on your original 2025 to 2026 tax return, which must be filed by 31 January 2027 online (the paper deadline is 31 October 2026); the election cannot be added later by amendment.
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What does carrying back actually do?
Normally a Gift Aid donation gets relief in the tax year it is paid. Under section 426 ITA you can elect for a qualifying donation to be treated as made in the previous tax year, which the legislation calls year P. Once the election is made, section 426(3) applies the Gift Aid rules in sections 414 and 423 to 425 as if the gift had been made in year P. In practice the gift extends your basic rate band (and higher rate limit) for year P instead of the current year, and it is taken out of the current year’s figures.
The election is yours alone. Section 426(7) says it does not affect the position of the charity, which claims its 25p for every £1 in the normal way. You do not need to tell the charity, and you still need a valid Gift Aid declaration for the gift to qualify at all.
Who benefits from a carry back?
gov.uk gives the two classic reasons: you want tax relief sooner, or you will not pay higher rate tax in the current year but you did in the previous year. Typical cases include:
- someone who retired or cut their hours in 2026 to 2027 after being a higher rate taxpayer in 2025 to 2026;
- a donor whose higher rate relief would otherwise wait until the 2026 to 2027 return in 2028;
- a donor whose 2025 to 2026 income sat just above a threshold that depends on adjusted net income.
That last point is often overlooked. gov.uk’s guidance on adjusted net income confirms that the grossed up amount of Gift Aid donations is deducted. Adjusted net income drives the Personal Allowance taper above £100,000 and the High Income Child Benefit Charge above £60,000, so a carried back donation can reduce either of those in year P.
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What conditions must be met?
Enough income and gains in year P
Section 426(2) requires your “charged amount” for year P to be at least equal to the increased total of gifts. Section 427 defines the charged amount as your modified net income for the year plus the amount on which you are chargeable to Capital Gains Tax. The increased total of gifts is, broadly, the grossed up value of the gifts being carried back plus the gifts you actually made in year P.
Enough tax in year P
Because section 426(3) applies the shortfall rule in section 424 to year P, carried back gifts must also be covered by tax. gov.uk states it plainly: your donations from both tax years together must not be more than 4 times what you paid in tax in the previous year.
The timing rule
Section 426(6) requires the election to be made on or before the date you deliver your return for year P, and no later than the normal Self Assessment filing date for that year. HMRC’s helpsheet HS342 (2026) says that Gift Aid payments made between 6 April 2026 and the date you submit your 2025 to 2026 return can be included in that return, and that HMRC cannot accept a first claim or a higher claim in an amended return.
What are the deadlines for the 2025 to 2026 return?
| How you file | Deadline for the 2025 to 2026 return | Donations that can be carried back |
|---|---|---|
| Paper return | 31 October 2026 | Those made from 6 April 2026 up to the day the return is filed |
| Online return | 31 January 2027 | Those made from 6 April 2026 up to the day the return is filed |
gov.uk confirms you cannot carry back if you miss the Self Assessment deadline. Two practical consequences follow. Filing early closes the window, so a donation made the week after you file cannot be carried back. And a late return loses the election entirely, as well as triggering a penalty; see Self Assessment deadlines and penalties.
How do you make the election?
On the Self Assessment return the carried back amount goes in box 8 on page TR 4, as HS342 explains. You enter the net amount you actually paid; HMRC grosses it up. You should not also include the same gift in the following year’s return.
If you do not complete a tax return, gov.uk says you can still get relief sooner by contacting HMRC: claims of £5,000 or less can be made by phone, and larger claims in writing. For claims on donations of £10,000 or more you also need to give the date of each donation and who it was made to.
A worked example
Illustration only. Priya earned £70,000 in 2025 to 2026, so she was a higher rate taxpayer. She retired in April 2026 and her 2026 to 2027 income will be well within the basic rate band. In November 2026 she gives £2,000 to charity under Gift Aid. The charity reclaims £500, making the gift worth £2,500.
- Without a carry back: the gift belongs to 2026 to 2027. As a basic rate taxpayer that year, Priya gets no extra relief.
- With a carry back: she files her 2025 to 2026 return online in December 2026 and includes the £2,000 in box 8. Her basic rate band for 2025 to 2026 is extended by £2,500, so £2,500 of income moves from 40% to 20% tax, saving her £500.
Priya easily meets the conditions: her income for 2025 to 2026 is far above the £2,500 grossed up gift, and the tax she paid that year is far more than a quarter of the gifts.
How does it affect payments on account?
gov.uk explains that each payment on account is usually half of the tax you owed for the previous year. Reducing your 2025 to 2026 liability by carrying back a gift therefore also reduces the payments on account due on 31 January and 31 July 2027 for 2026 to 2027. Because the gift no longer counts in 2026 to 2027, the final balancing payment for that year may be correspondingly higher. More on the mechanics is in Self Assessment payments on account.
What mistakes come up most often?
- Trying to add a carry back in an amended return. HS342 says HMRC cannot accept a first or higher claim that way.
- Filing the return first and donating afterwards, then expecting to carry the gift back.
- Claiming the same donation in both years.
- Carrying back into a year with too little tax. The shortfall charge then applies to year P instead.
- Assuming a carry back only helps higher rate taxpayers, when it can also reduce adjusted net income for the previous year.
The underlying higher rate relief and the shortfall charge are explained more fully in claiming higher rate relief on Gift Aid.
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Related Accountapedia entries
- What changes when you become a higher rate taxpayer
- Adjusted net income explained
- Gift Aid claims by charities
- Can a sole trader claim charity donations
- Payroll giving: how it works for employees and employers
Sources
- legislation.gov.uk: Act 2007 c. 3, section 426
- legislation.gov.uk: Act 2007 c. 3, section 427
- GOV.UK: Gift aid
- GOV.UK: Adjusted net income
- GOV.UK: Hs342 charitable giving 2026
- GOV.UK: Deadlines
- GOV.UK: Payments on account
- GOV.UK: Income tax rates
- legislation.gov.uk: Act 2007 c. 3, section 424
Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.