Charities will no longer have to obtain signed gift aid declarations on the first £5,000 of small donations per year in order for those donations to qualify for the tax relief, Chancellor George Osborne announced in his Budget speech.

Gift aid will be automatically applied to the donations. Osborne said 100,000 charities would benefit from this to the tune of £240m. The announcement was the first of a number of major new initiatives affecting charities which Osborne described as "the most radical reforms to charitable giving for more than 20 years". He said the reforms would support giving, "from the largest donations to the coins collected in the charity bucket. We will introduce a new scheme where gift aid can be claimed on small donations, up to a total of £5,000 a year per charity, without the need for donors to fill in any forms on gift aid declarations at all. That means gift aid on the contents of the collecting tin and the street bucket."

In order to comply with European Law the UK Government is extending UK charitable tax reliefs to European charities. In an attempt to ensure that tax reliefs are used for charitable purposes only, a new 'Fit and Proper Persons' test is being applied to all charities seeking to benefit from UK charitable tax reliefs.

For more information please contact our charities team.