Share

Hurd: sector must now move on from tax relief cap row

Minister for Civil Society Nick Hurd
News

Hurd: sector must now move on from tax relief cap row 2

Finance | Vibeka Mair | 1 Jun 2012

Minister for civil society Nick Hurd has said it is important that the charity sector draws a line under the row over the tax relief cap on charitable donations so it can work with the government on agendas that really matter for the sector.

Sir Stephen Bubb, chief executive of Acevo, said that in a phone call with Hurd, both agreed that it was important for the sector and government to put it behind them: “This dispute was overshadowing all we did and harming the government's attempts to promote giving and the open public services agenda,” said Sir Stephen in his blog.

However, while the charity tax relief cap has been abandoned, the withdrawal of VAT exemptions for alterations to listed buildings - a move which affects many heritage charities and churches - remains.

Yesterday, Chancellor George Osborne revealed that charitable donations would be exempt from the tax relief cap. Community interest tax relief will also be exempt.

The cap, which limited tax relief on charitable donations at £50,000 or 25 per cent of income (whichever is higher), was announced by Osborne in March’s Budget and was expected to save Treasury up to £80m a year. 

The proposal led to vociferous protest from the charitable sector and its supporters, notably the campaign GiveItBackGeorge, led by NCVO and CAF, garnered much support.

Sector commentators have been unanimous in their support for the government’s U-turn on the charity tax relief cap, which followed policy reversals on taxes on pasties and caravans this week.

HMRC may not be satisfied

But George Bull, senior tax partner at Baker Tilly, has warned charities to celebrate with caution:

“The vast majority of honest charities and donors will hope that today’s announcement draws a line under this episode.

"However, HMRC may fear that some of the perceived abuses which they were trying to tackle will continue if specific action is not taken against them. There should be no surprise if HMRC bring forward more targeted anti-avoidance measures over coming months”.

Chancellor George Osborne had defended the tax relief cap – including on charitable donations– by saying that he had evidence that a number of the country’s highest earners were using legal tax loopholes – including charitable giving – to slash their bills.

However, when he was asked by the sector to provide evidence of this, none was forthcoming.

 

Anon
Trustee
6 Jun 2012

I don't think many Trustees would object to HMRC bringing forward "targeted anti-avoidance measures over coming months".

If there are abuses involving abuses in donations to, for example, overseas charities or charities where the donor is able to benefit in some way then I would be happy to see action.

Kevin Russell
Technical Director
Stewardship
1 Jun 2012

The withdrawal of a cap on tax relief for charitable giving is most welcome and returns the Government to a more coherent policy standpoint when it comes to 'Big Society'.

I don't think that the sector should be too worried going forward. If a major donor gives away £1 of their income in order to see 45p of that ending up in the charity's hands (yes, 45p, not 20p), it has still cost them 55p which contributes to the good of society. Not very clever tax planning, and certainly not in the category of "morally repugnant."

The sector has demonstrated to Government that the 45p given through the tax system to charity is saving the Exchequer several multiples of that sum - benefits to society that Government would otherwise have to fund.

Evidence collected in the last few months, by organisations such as Stewardship, from philanthropists, has also demonstrated that reducing or restricting tax relief would not only amount to a 'tax on charities', but would reduce giving. This too runs counter to Government policy for the sector.

So, common sense has won the day - and I don't forsee that changing.

Comments

[Cancel] | Reply to:

Close »

Community Standards

The civilsociety.co.uk community and comments board is intended as a platform for informed and civilised debate.

We hope to encourage a broad range of views, however, there are standards that we expect commentators to uphold. We reserve the right to delete or amend any comments that do not adhere to these standards.

We welcome:

  • Robust but respectful debate
  • Strongly held opinions
  • Intelligent relevant discussion
  • The sharing of relevant experiences
  • New participants

We will not publish:

  • Rude, threatening, offensive, obscene or abusive language, or links to such material
  • Links to commercial organisations or spam postings. The comments board is not an advertising platform
  • The posting of contact details for yourself or others
  • Comments intended for malicious purpose or mindless abuse
  • Comments purporting to be from another person or organisation under false pretences
  • Gratuitous criticism, commentary or self-promotion
  • Any material which breaches copyright or privacy laws, or could be considered libellous
  • The use of the comments board for the pursuit or extension of personal disputes

Be aware:

  • Views expressed on the comments board are left at users’ discretion and are in no way views held or supported by Civil Society Media
  • Comments left by others may not be accurate, do not rely on them as fact
  • You may be misunderstood - sarcasm and humour can easily be taken out of context, try to be clear

Please:

  • Enjoy the opportunity to express your opinion and respect the right of others to express theirs
  • Confine your remarks to issues rather than personalities

Together we can keep our community a polite, respectful and intelligent platform for discussion.

Free eNews

CTG attacks HMRC for breaking promises over implementation of 20 per cent tax on direct mail

16 Apr 2015

Charities have been left unsure how to obey tax rules after HM Revenue & Customs failed to publish...

NCVO and CFG express concerns over government review of business rates

13 Apr 2015

Infrastructure bodies including NCVO and the Charity Finance Group are consulting charities over a government...

Grant-makers face 'big decisions' as a result of 'seismic shift' in commissioning, says report

9 Apr 2015

Charities and funders face big decisions after a “seismic shift” in public service commissioning,...

SNP would push for full devolution of welfare system

20 Apr 2015

The Scottish National Party MPs will push Westminster for devolution of powers on welfare payments and...

National Theatre's first chief executive quits citing problems with leadership structure

17 Apr 2015

The National Theatre's first chief executive, Tessa Ross, has resigned after five months at the organisation,...

Legion condemns poppy use on Ukip campaign advert

17 Apr 2015

The Royal British Legion has said that it is working to make sure that its poppy is “never again”...

Oxfam trials tap-to-donate technology

17 Apr 2015

Oxfam GB is running a trial of near-field communication technology to allow supporters to both donate...

Ice Bucket Challenge effect brings down average online donation amount

15 Apr 2015

The average online donation fell by 8.6 per cent in 2014 to £63.69, according to a survey by fundraising...

Education charity UCAS broke electronic marketing rules, says Information Commissioner

9 Apr 2015

The Universities and Colleges Admissions Service broke electronic marketing rules because its admission...

Join the discussion

Twitter button

@CSFundraising