The legislation designed to simplify and strengthen the Gift Aid Small Donations Scheme has received royal assent.
Parliament has announced that the Small Charitable Donations and Childcare Payments Act will come into force at the beginning of the 2017/18 tax year, which starts on 6 April.
The GASDS, which was introduced in 2013, allows charities to claim Gift Aid-like relief on up to £8,000 of small cash donations each year without having to submit paperwork for each individual claim.
The new act makes several changes to the scheme, including the removal of the two-year rule, under which charities must have been registered for at least the past two years before accessing the GASDS.
The act also scraps the requirement that charities must have made successful Gift Aid claims in at least two of the previous four years, which will enable newly formed charities to access the scheme, and allows small donations made by contactless payment to be covered by the GASDS.
The government estimates that the reforms to the GASDS included in the act will increase the amount of Gift Aid claimed by charities under the scheme by £15m a year. The GASDS currently delivers £26m a year to the charity sector.
But this remains significantly short of the £100m a year the government initially expected the GASDS to raise.
During debates in parliament about the act, there was criticism of the retention of the matching rule, which says that charities must claim £1 in Gift Aid for every £10 claimed under the GASDS, and the decision to not allow other forms of payment, such as cheques and text donations, to count towards the GASDS.
The act completed its passage through the House of Commons on 16 November and the House of Lords on 12 December. The act was designated as a money bill, which means it receives royal assent within a month regardless of whether it passes through the Lords.