Giving Summit critical date for tax relief cap, says Philanthropy Review chair 1

Fundraising | Celina Ribeiro | 4 May 2012

Thomas Hughes-Hallett has warned that if there is no announcement on the proposed tax relief cap by next week’s Giving Summit, the sector will face an uphill battle to get it amended.

The Marie Curie Cancer Care chief executive said that he, along with two others, have been in daily contact with the Treasury, lobbying for changes to the proposed cap on the amount of tax relief that higher-rate taxpayers can claim on donations to charity. They had expected an announcement on the subject this week but, said Hughes-Hallett, “the silence is deafening”.

The agenda for next Tuesday's Summit does devote a whole hour to discussing the tax relief cap, with the session hosted by David Gauke MP, Exchequer Secretary to the Treasury.

But if no change to the cap is announced at the Summit, charities and donors will need to effect a step-change in the way they lobby for reform, said Hughes-Hallett. In the event of a no-announcement Giving Summit, he said: “We really need to make a fuss.”

In the future, charities will have to provide concrete examples as to what impact the cap will have on their ability to help beneficiaries. So far, he said, “the shouting is not helping the sector”.

But, Hughes-Hallett, also the chair of the Philanthropy Review, expressed concern that any new deal on the tax relief cap could threaten the share tax incentive.

The CEO-philanthropist has previously not spoken out publicly about his views on the controversial tax relief, but aired his thoughts yesterday at the Philanthropy Programme symposium, organised by EAPG and STEP, in London.

'Along comes Bilbo Baggins'

Hughes-Hallett said that in the period leading up to the tax relief cap announcement in the March Budget, the environment for philanthropy was “rapidly improving”, with more philanthropists encouraged to give more. This, he said, has now “totally changed”.

“Along comes Bilbo Baggins and calls us all tax dodgers,” he said. Claiming the wealthy give to avoid tax, he said, is no way to encourage them to give more.

Attempting to unpick the motivation for the tax relief cap on donations, Berwin Leighton Paisner partner Rupert Ticehurst said: “I never understood how charities can be used for tax evasion.”

Hughes-Hallett said the impact on charitable donations, “was a mistake… it’s not something they intended”.

However, he added: “Treasury don’t like the wealthy getting to act as their own Chancellor of the Exchequer.”

Directory: Marie Curie Cancer Care
Who's Who: Sir Thomas Hughes-Hallett

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Hilary Barnard
Principal Consultant
HBMC
4 May 2012

Both parties in the Coalition Government have done rather poorly in yesterday's elections. These elections have represented the biggest test of public opinion since the 2010 General Election. While there have been many other factors that have contributed to these results, there is no doubt that the 'charity tax' has added to the unpopularity and consequent loss of votes.
I have no objection to quiet diplomacy but Hughes-Hallett's account suggests that it is not working on this occasion. Politicians may be more persuaded by the judgement of the electorate. Continuing with an unpopular policy in such circumstances, particularly one dreamt up in the Treasury in isolation from the Departments most engaged with the third sector, needs considerable justification when it brings unpopularity and costs votes. It is not party political to point this out.

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