30 March 2012
Eight out of 10 major philanthropists say plans to cap tax
relief on major donations will reduce the amount of money given to
charity, according to a survey by the Charities Aid Foundation
(CAF).
83% of donors questioned said they felt that the change,
announced in the Budget, would reduce philanthropic donations.
A number of charities – such as CAF and the National Council for
Voluntary Organisations (NCVO) and ACEVO – have expressed alarm at
the Chancellor’s announcement in last week’s Budget that tax relief
on major donations will be capped at £50,000 or 25% of annual
income from April next year.
They have called for urgent talks with the Treasury, amid fears
the change will strangle major donations and cost charities
millions of pounds a year.
More than a quarter of donors surveyed by CAF, which works with
hundreds of the biggest donors in the UK and overseas, said the
plans would lead to a significant fall in their own donations to
charity.
Nearly half of the donors saying that tax changes could force
them to cut donations said their donations could fall by more than
40%.
Nearly 200 philanthropists, who have all donated an average of
over £50,000 a year over the past three years to charity, responded
to the survey, carried out over the weekend.
Major donations are worth huge sums to charity. The top 100
donors gave a total of £1.67 billion to charity, according to the
last Sunday Times Giving List 2011.
CAF Chief Executive John Low said: “The tax changes in the
Budget have created alarm and concern among both charities and
philanthropists.
“Our survey shows that the Chancellor’s proposed tax changes
could have dire consequences for charities, which need the support
of major donors more than ever.
“Wealthy donors are using tax relief to help them make donations
to good causes, which in some cases run to millions of pounds. But
this does not just affect the hyper-rich. In some cases people
receiving legacies or lump sum investments make major donations and
rely on tax relief to help them back good causes.
“At a time when charities are under increasing pressure, due to
funding cuts and greater need in society, the Government should be
encouraging major donors to dig deep in their pockets, not changing
the tax rules to put them off making donations.”
He added: “This move seems to have been ill conceived and at
odds with the Government’s concept of a Big Society.”
In response to the tax change, CAF, the NCVO, and a range of
other charities, last week launched a campaign: Give it Back George
- Drop the Charity Tax!, through which they hope to persuade the
Government to amend its proposals.
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