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.