Sector leaders again urge government to scrap the tax relief cap

Sir Stephen Bubb of Acevo is among those saying the coalition should change its mind, as it has done over VAT on pasties and static caravans

Sir Stephen Bubb
Sir Stephen Bubb

Voluntary sector leaders have called for a u-turn on the tax relief cap after the government’s climbdowns on the proposed pasty and caravan taxes.

The proposed cap, announced by the Chancellor, George Osborne, in this year’s Budget, would limit individual claims for tax relief on charitable donations to £50,000 or a quarter of their income, whichever is higher, from April 2013.

Peter Lewis, chief executive of the Institute of Fundraising, said: "The government has shown it has listened to public concerns on its pasty tax – it should also listen to public concerns about plans that will hit much-needed charity giving."

Sir Stephen Bubb, head of the charity chief executives body Acevo, said: "The government’s decision to u-turn on pasties but to stick with the charity tax shows where its priorities lie.

"When it comes down to it, Greggs’ profits matter more than the charities we once thought central to the Prime Minister’s big society vision."

Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations, said: "The concessions from the Chancellor show that he is willing to listen to reason after a period of genuine consultation. We hope he will apply the same logic to the much-maligned 'charity tax'.

"The cap on Gift Aid is already putting donors off. It is affecting the vital work undertaken by charities both large and small, be that advancing medical research, supporting returning veterans or caring for the elderly."

More than 1,000 charities have backed the campaign against the tax relief cap, called Give it Back, George.

John Low, chief executive of the Charities Aid Foundation, said: "Now is the time for [the government] to listen to charities, donors and its own supporters, do the right thing and exempt charitable donations from the damaging tax cap.

"The Prime Minister’s vision of a big society could be transformational, but risks being undermined by measures such as the cap on tax relief for charitable donations."

A survey of 2,044 people, commissioned by CAF, found that nearly two-thirds of respondents were concerned that plans to cap tax relief on donations undermined the government’s concept of a big society.

The poll, which was released this week, found that 76 per cent of those surveyed agreed that the government could not expect charities to play a greater role in providing services if it introduced the cap.

The Conservative MP David Ruffley has been quoted in several newspapers saying that the government was preparing to make a climbdown on the tax relief cap. He declined to speak to Third Sector about the comments.

A spokeswoman for the Treasury said: "The government supports philanthropy and charitable giving, but we also believe that there is an important principle that everybody should make a fair contribution to the public finances through income tax.

"The Budget made clear that we want to ensure charities that rely on large donations are not hit significantly, which is why we said we’d spend time working with the charity sector and philanthropists on the details."

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