Government promises formal consultation on tax relief cap for philanthropists

Downing Street says 'various options could be explored' to avoid a drop in charitable donations

Downing Street
Downing Street

Downing Street has promised that the government will launch a formal consultation in the summer into a cap on tax relief for philanthropists.

The cap means that tax relief can only be claimed on donations worth less than £50,000 or 25 per cent of a donor’s income, whichever is higher.

Speaking at a briefing this morning, a Downing Street spokeswoman said that the government did not want the cap to lead to a reduction in donations to charities, and that various options could be explored.

The government has this morning already defended the need to cap tax reliefs available to wealthy donors, saying that 9 per cent of people earning more than £10m a year paid less than 20 per cent in tax in 2010/11.

Almost two thirds of backbench Conservative and Liberal Democrat MPs say they oppose the cap, a poll commissioned by the Charities Aid Foundation also showed.

Visit our Big Issue for recent stories and background on the government's tax relief cap proposals

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