From April 23, charities with an annual income below £5,000 will no longer have to register. The provision was part of a commencement order laid before Parliament last week.
Currently, any charity with an income of more than £1,000 a year is required to register and prepare an annual report. The commission has estimated that the relaxation of the rule could save smaller charities £1.3m in staff costs or volunteer time.
A spokesman for the Cabinet Office said: "Small charities tend to suffer disproportionately from the requirement to prepare reports because the process takes up such a large amount of their time."
The Charity Commission also estimated that 20 hours of trustee time will be saved by each of the 1,500 small charities that register for the first time each year. This is equivalent to a total saving of £500,000 across the sector.
Registered charities with an income below £5,000 will remain on the register unless they ask to be removed. A forthcoming section of the Charities Act will also oblige the commission to register any small charity that requests it to do so. Current regulations state that it need only register small charities where there is a compelling reason.The requirement for small charities to register if they hold permanent endowments or occupy land will also be removed.
All charities will remain under the regulatory jurisdiction of the Charity Commission, regardless of whether they are registered.