The government has announced plans to halve the processing time for charitable donations made using Payroll Giving in a bid to encourage wider use of the scheme.

The time taken to pass on donations, which are made direct from an individual's salary via their employer, is to be cut from 60 to 35 days. Payments made are free from income tax, so the charity receives the full donation upfront rather than having to reclaim the tax afterwards.

The government has said it will also create improved webpages to provide an online presence for donors, employers, charities and Payroll Giving agencies, and will be hosting a series of working groups to help Payroll Giving agencies and charities consider further improvements.

Over £1.4bn has been donated via Payroll Giving in the last 25 years, with £124m raised from 750,000 donors in 2012-13, but charities and the government think the total collected could be considerably higher.

The economic secretary to the Treasury Sajid Javid, said: 'Payroll Giving provides a unique way for employers to encourage and champion donations, and the government is committed to increasing the amounts raised.'

The latest enhancements to the system follows a consultation that ran from January to April 2013 which took in views from charities, businesses, individuals, professional fundraising organisations and Payroll Giving agencies.