Charities will have to pay fees for playing music at events or in public places such as charity shops, the Government has decided.
In its response to a consultation carried out by the Intellectual Property Office on music licensing, the Government said it supported proposals to remove the charity exemptions from paying fees to Phonographic Performance Limited, which represents the interests of music producers and performers.
The current exemption enjoyed by charities will be repealed and organisations will be liable to pay a fixed fee on playing music from April.
A spokesman for the IPO said the figure would be set after consultation between the PPL and the Community Sector Law Monitoring Group, a group of charity sector representatives. The fee was likely to be less than £100 a year, he said.
The plans were criticised by sector umbrella body the NCVO.
"It is shameful that money intended for charitable causes will go on paying royalties for playing music," said Stuart Etherington, chief executive of the NCVO.
"This scheme will make it impossible for small community-based charities or organisations to play music at their social and fundraising events because of the cost involved," he said.
The Government's response to the consultation said abolishing the exemptions would create a simpler system.
"In our consultation meetings, almost all the representatives of the third sector organisations agreed that it would be preferable to have a simple licensing system, if possible with an affordable, flat fee rather than to have a complex system with limited exemptions," it said.