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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