UK & World News
- 15 April 2012, 18:10
Ministers Under Pressure In Charity Tax Row
Ministers are thought to be considering changes to plans to cut tax relief for people donating money to charity - as leading philanthropists warn the proposals could deter gifts.
Amid rising criticism of the plans, Foreign Secretary William Hague told Sky News: "Finding a solution that takes account of the concerns that have been expressed is something the Prime Minister and the Chancellor are open to."
Among those raising concerns were the head of Marie Curie Cancer Care, the co-founder of the Body Shop and three daughters of Lord (David) Sainsbury, the Labour peer.
Nearly 50 donors writing in the Sunday Telegraph said the changes would be a "brake on philanthropy".
Amid mounting criticism, the paper reports ministers are now looking at changes to the plans, which are aimed at closing a tax avoidance loophole.
Higher-rate taxpayers donating to a charity can currently reclaim more than half of the tax, in some cases reducing their tax bill to nothing.
But under the plans announced in the Budget, from next April the relief would be limited to £50,000 a year, or 25% of the giver's income.
Charities fear that this will cause a large drop in donations, and some may choose to donate nothing.
Sir Menzies Campbell MP, who is chancellor of the University of St Andrews, told Sky News' Murnaghan programme there is "anxiety" among charities about how they would secure funds under the new plans.
Speaking days after the university received a donation of £1m, he said: "There doesn't appear to have been any consultation about (the new rules)."
And he added: "The consequences of the increases... have got to be regarded with great seriousness."
Philip Spedding, head of the Prince of Wales' arts philanthropy charity, told the Sunday Telegraph the plans were "astonishing".
In the donors' letter, they said: "The proposal in the Budget to cap charity tax reliefs is a brake on philanthropy that may defer future donors.
"It is confusing and dispiriting, and we urge the Prime Minister and Chancellor to think again."
They said their gifts were not just for tax relief, "although it may substantially increase our donations".
Conservative MPs and Liberal Democrat Business Secretary Vince Cable have previously expressed their unhappiness with the proposals.
The Treasury has insisted the plan will go ahead.
It said: "The Government does not think that it is right that very wealthy individuals can use tax reliefs without limit to reduce their tax bills to close to zero, often year after year.
"We support charitable giving and the vast majority of donations will be completely unaffected."
what do you think?
Jade Hutton
why do peeple on here always go on about either labour, or the conservatives. labour did this, labour did that conservatives did this, conservatives did that. they are both the same, once in goverment they break there promises to what they said in the manifesto to get elected then go on to doing the agenda of the people that actualy run our goverment whether its labour or conservatives, its the people that own the banks, own the oil companys and other big billion pound corperations that have pull the strings of our goverment no matter which party it is in power. you have the illusion of choice, thats all.
gordon
Which billion pound corporation pulled the strings to put VAT on church repairs?
Jade Hutton
the fact that we pay VAT at all is down to these corperations, they all want more for themselfs and less for everyone else.
Kevin Hough
This is a nonsense. Pay your taxes AND give to charity if you so wish, it is nothing but a scam for people who employ, and who rich enough to employ, clever accountants to escape paying their full share. PAYE employees - the majority of us in this great country of ours - have no choice in this matter. I give to charities because I WANT TO GIVE, not as a way of avoiding my responsibilities.
andy may
my view of charities has changed over the last week. seems to me they're not bothered about people defrauding the country as long as their agendas fullfilled. the larger charities all employ very well paid execs and are basically businesses in their own right. i agree with kevin hough, pay the tax you should and if you want to give to charity, do it at your own expense. these rich guys give their money to charity instead of the country and then try to make out they're some kind of heros. they're not, they're as bad as benefit cheats.
Jade Hutton
Not sure if this is relevent or not, but few years back when there was a large earth quake in some where in the world. I had a knock on the door and it was from a representative from the red cross, they was doing door to door trying to get people to give 2 pounds a month (or what ever they could give) to help with various disaters and people in need around the world. I was looking into doing some charity work at the time and i recall asking him if they was looking for people to help and try raise fund s. He told me that they was taking on people in the next few weks and for every person you get to sign up for 2 pounds a month, that you get 20 pounds. doing the math, that would mean that anyone giving 2 pounds a month to chairty thinking its going to a good cause, the first year of that 2 pounds a month is actualy just gone to the person that signed you up. so for the first year your money isnt even going to the good cause you think it is.
Peter Schabel
Kevin Hough i agree with gordon what do you give to charities ,not alot i think, without these big donations alot will not be able to run and the poor and needy will be the ones who suffer, and what about the research charities pay for if that stops the goverment will have to foot the bill for that. oh where will the money come from?
Kevin Hough
Pompous and presumptuous. You know nothing about what I give to charities and what causes I care for, I give because I want to and because, it has to be said, I can afford to. I do not need it offset against tax to carry on giving. Read what I have said again. Also if you have the temerity to criticise my comments again please punctuate correctly and use your spell-checker.
andy may
peter, don't project your own values on to others when you know nothiing about them. the large charities are big business, go research.
Alf Bibby
Calamity Cameron backtracking whats new
Jonathan Goodwin-Self
So now 90% of Conservatives and 100 % of Lib Dems and Labour will vote against everything that Cameron and Osbourne want so there will be a General Election this summer. Bye Bye to Cameron ans Osbourne because in their constituencys about 99% will not vote for them
IRONSTINE
they are the elected government, unfortunately. what ever were the liberals thinking about.
John Byrne
I guess the big donations are not gift aided then, must just be the normal working people that fully give what they can afford to charity.
gordon
8:32am on 15/4/2012
They rob pensioners, they rob charities, they rob churches. How low can conservatives go? Money given to charities to avoid paying tax is used far better than the government getting their hands on it.
andy may
10:03am on 15/4/2012
you're using a poor example if you think the church should be exempt from paying VAT. this is an organisation that has taken from the poor for hundreds of years to satisfy the greed of one of the richest and biggest landowners in the country. the church robs pensioners, the poor and many childrens innocence and then have the afront to call themselves a charity. it's about time the church paid it's way.
Ron Taylor
12:27pm on 15/4/2012
They are also robbing the genunie disabled-unless your going to die in the next sixth months - get a job
Jonathan Goodwin-Self
1:38pm on 15/4/2012
They also give billions to the euro and to overeseas aid plus allowing millionaires to have a fortune back and not pay taxes. The Cons are now at the lowest level in history and will never win any election