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Chancellor backtracks on charity tax relief

The Chancellor has dropped plans to limit tax relief on charitable giving, amidst protests from charity groups.

In the Budget George Osborne announced a limit of £50,000 or 25% of income (whichever was highest) as the amount a person could donate instead of paying it in tax.

In an announcement on the rethink, Mr Osborne said: “I can confirm that we will proceed next year with a cap on income tax reliefs for wealthy people, but we won’t be capping relief for giving money to charity.

The news was welcomed by charitable groups, although Labour condemned the move as “shambolic”

The Chancellor made the decision in response to large-scale tax avoidance by the rich, after witnessing the results of a confidential study by HM Revenue and Customs. It was suggested that wealthy donors were money to charities which actually do very little charitable work.

Mr Osborne continued: “It is clear from our conversations with charities that any kind cap could damage donations, and as I said at the Budget that’s not what we want at all. So we’ve listened.

“We’re going to concentrate our efforts on what really matters: keeping Britain safe in the gathering storm.”

A Government spokesman added that the decision to remove the cap was due to the uncertainty which it could cause, as well as creating a risk to the charity sector.

The consultation on how a cap would be imposed on the other tax relief measures will continue this summer.

This was posted in Bdaily's Members' News section by Ruth Mitchell .