Sector leaders call for meeting with Chancellor

They want to warn George Osborne that the Budget's cap on use of tax relief could put large donors off giving to charity

George Osborne
George Osborne

The heads of six major voluntary sector bodies have written to the Chancellor calling for a meeting to discuss the cap on income tax reliefs announced in this week’s Budget.

George Osborne said in his speech to parliament on Wednesday that the government would limit the amount of tax relief an individual can claim in any year to a quarter of their income or £50,000, whichever is higher, from April 2013.

The joint letter, signed by the leaders of Acevo, the National Council for Voluntary Organisations, the Charity Finance Group, the Institute of Fundraising, the Charity Tax Group and the Charities Aid Foundation, says: "There is a clear danger that this measure could have the unintended consequence of disincentivising the donation of large gifts to charity.

"Charities rely heavily on major philanthropy of this kind, and any reduction in giving could be devastating for many vulnerable people who rely on our services," it says.

"The measure is also clearly 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."

It asks for a meeting with Osborne in the next few weeks to discuss the issue.

HM Revenue & Customs indicated earlier this week that it would meet charities to discuss the matter.

Asked to comment on the letter, a spokeswoman for the Treasury said: "The new cap on unlimited income tax reliefs is being introduced to ensure that those on higher incomes cannot use them excessively. Individuals will still be able to claim the greater of £50,000 or 25 per cent of their income in reliefs.

"The government is exploring with philanthropists and others in the charity sector ways to ensure this new limit will not significantly impact upon charities that depend on large donations."

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