Tax changes could strangle major donations - says charity

21 March 2012

Major philanthropists may be put off making substantial donations to charities because of changes unveiled in today’s Budget.

Under changes to tax relief announced by the Chancellor, those wanting to make major lump sum donations could be hit by lower tax relief on donations of more than £200,000.

Following the announcement, the Charities Aid Foundation (CAF) has called for urgent talks with the Treasury to ensure caps on tax relief announced in the budget do not strangle major donations by wealthy philanthropists.

CAF fears that the changes could reduce the amount donated to charity by millions of pounds each year.

CAF Chief Executive John Low said: “Government can’t have a philanthropy agenda on the one hand and then introduce measures like this on the other. This change seems to run counter to the very idea of Big Society.

“These changes represent a huge cut in tax relief on major donations to charity by wealthy philanthropists whose generosity is supporting some of the most vulnerable people in society.

“Tax relief on major donations is not tax avoidance. It is supporting major donations by people who in some cases are donating the proceeds of a lifetime’s work to charity.

“Such a change risks reducing major donations by Britain’s richest individuals at a time when charity budgets are being squeezed. We need urgent talks with the Treasury to ensure that this does not affect charity finances.

“Now more than ever we should be making it easy for people to donate to charity. It is vital that Government does all it can for charities in these challenging times. Demand for the services of charities is on the rise, but revenues remain under threat; the recent accounts filed with the Charity Commission in 2012 show a two per cent drop in revenues compared to the start of last year.”

CAF were among the six organisations who wrote to Mr Osborne on this issue shortly after the budget was announced, urging him to reconsider his approach.

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