Tax reliefs provided to charities and donors will rise by £140m to £3.32bn in the tax year ending in March 2011, HM Revenue & Customs has predicted.
The latest figures from HMRC show that it expects to give £2.53bn of tax relief to charities in 2010/11, up from £2.43bn the previous year.
It expects to make a further £790m of relief to donors during the year, up from £750m.
The £140m increase represents a rise of 4.4 per cent.
The figures also predict a rise in VAT relief for charities from £150m to £200m, although this figure is rounded to the nearest £50m.
The main tax reliefs offered by HMRC to charities are Gift Aid, expected to rise from about £1.03bn to £1.07bn, and business rate relief, expected to rise from £1.14bn to about £1.16bn.
The largest personal reliefs are inheritance tax relief, expected to rise from £330m to £360m, and higher-rate relief on Gift Aid, up from £330m to £340m.