New Tax Relief Arrangement of Small Cash Donations to a Charity

In previous years, charities were unable to claim a tax refund on small cash donations.  New rules will see this change.

The HMRC have announced that charities can now reclaim the basic rate tax of 20% deducted from a cash donation of no more than £20.  This type of donation, usually from street collections etc, will now be considered a gift.

These new rules will allow charities to claim back up to £1,250 of the £5,000 per year limit on small donations.

Those who pay tax above the basic rate will not be subject to a higher rate tax relief on these small cash donations.  The original Gift Aid scheme provides this kind of relief if that is what you are looking for.