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

Barnardo's launches retail gift aid appeal

23 Jul 2014

Barnardo’s has launched an appeal to raise awareness of retail gift aid and the extra £6.5m that could...

Charity Bank loan approvals up 83 per cent

23 Jul 2014

Charity Bank has reported a sharp upturn in loan approvals, and has cited this as evidence that the sector’s...

Workfare charities set to be named after Tribunal rules against DWP

23 Jul 2014

Charities that are involved in the workfare programme run by the Department for Work and Pensions look...

Workfare charities set to be named after Tribunal rules against DWP

23 Jul 2014

Charities that are involved in the workfare programme run by the Department for Work and Pensions look...

Nesta was 'forced' to fund Big Society Network, says former trustee

22 Jul 2014

Former Nesta trustee Liam Black tweeted this morning that Nesta was “forced” to fund Big Society Network. 

Sadiq Khan MP: 'Sarah' Bill is embarrassing and pathetic

22 Jul 2014

Labour MP Sadiq Khan yesterday called the Social Action, Responsibility and Heroism Bill “embarrassing...

Greenpeace video removed from YouTube following copyright claim

14 Jul 2014

A campaign video by Greenpeace against Lego’s relationship with Shell has been subject to a copyright...

Oxfam advert removed after appearing before extremist videos

10 Jul 2014

Oxfam has removed one of its adverts from YouTube after it was shown on channels showing content from...

Data protection proposals 'potentially catastrophic' for fundraising

8 Jul 2014

EU data protection proposals could have a “potentially catastrophic” impact on charity fundraising,...

Join the discussion

Twitter button

@CSFundraising