The UK government has pledged to return the tax paid on money donated to registered charities via a scheme called Gift Aid. There are rules on which donations you can claim Gift Aid on, but put most simply, charities can claim back 25p on every £1 donated by an eligible individual. Charities will ask donors to fill out a short form confirming that they are a UK tax payer and are happy for Gift Aid to be claimed on their donation.
There is also a small donations scheme that allows charities to claim Gift Aid on the small donations from community events or street collections, without needing each person to fill out a form. Gift Aid cannot be claimed if the person giving the money receives something of value in return, for example if they were buying charity Christmas cards. Gift Aid is an important source of income for the voluntary sector.