The UK government and mobile phone operators has reach an agreement to stop taxing donations to charities sent via text message.

The agreement which was set up by the Mobile Data Association (MDA), gifts made to a dedicated short code will have the VAT waived.

This agreement means charities will be will be able to receive an estimated 10p in the £1 extra for text gifts of up to £10. Prior to the agreement that comes into force today, only large charity events, such as Comic Relief have VAT waived in this way.