Charities dismayed by Chancellor's anti-avoidance plans

29 March 2012

Charities have banded together to protest at Chancellor George Osborne's plans to cap donor tax relief, announced in last week's Budget.

The measure will place a GBP50,000 ceiling on the total amount of certain types of tax reliefs (essentially, those that are currently uncapped) that can be claimed by a UK taxpayer in any one year. It will not take effect until the 2013-14 tax year, and in the meantime the Treasury plans to consult on how the cap can be implemented without damaging charities' receipts from wealthy philanthropists.

But, alarmed by the prospect, charities have already taken the initiative and demanded a rethink of the whole concept. Two leading umbrella bodies, the National Council for Voluntary Organisations and the Charities Aid Foundation, have set up a website calling on Osborne to exclude charities from the proposed cap. More than 200 organisations have already signed up to support the campaign, called Give It Back George.

The two bodies have also written Osborne an open letter to the same effect.

"We believe the unintended consequences of this measure could affect donations to charity by disincentivising the donation of large gifts to charity", says NCVO in a statement. "Charities rely heavily on major philanthropy donations."

It says the anti-avoidance measure "could be at odds with the Government's commendable efforts to promote philanthropy, sending the wrong signal to major donors who have thus far been encouraged to give more."

Moreover, the charity movement is concerned that Osborne's idea will bracket philanthropy as a kind of tax avoidance by the wealthy, giving it a bad name.

Some are even threatening to show their displeasure by boycotting the government's Giving Summit, scheduled for early May. "It is hard for charity leaders to sit quietly listening to plans to get people to give more when their fundraising strategies have been torpedoed", said Sir Stephen Bubb, chief executive of the Association of Chief Executives of Voluntary Organisations.

 

Sources

 

NCVO

NCVO/CAF open letter (PDF)

Civil Society UK

Third Sector UK

Third Sector UK (2)

Guardian

 

 

 


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