BBC’s political editor Nick Robinson has warned that the current political and economic imperatives suggest that the Treasury will try to introduce a charity tax cap again.
Speaking yesterday at a GAM charities seminar, Robinson told the audience that it lived in an era where governments wanted to make promises, when there is no money.
“There’s Labour and its promise to repeal the bedroom tax, and the Conservatives' promises on fuel duty. These will cost billions and the money has to come from somewhere.”
Robinson suggested that for this reason the Treasury will revisit the prospect of a charity tax cap, an idea the coalition government ditched last year after fierce opposition from charities and donors.
“They’ll need the money. That’s why they came for it the last time. And the Chancellor of the Exchequer has argued before that the wealthy are using charitable giving as a tax shelter.”
Robinson said governments would rather be seen to be taking money from the rich. “We should look at the wider tax avoidance debate. It’s about more to be gained from the wealthy. And this will include tax breaks from their charitable giving.”
Last year, the government buckled to pressure from the charity sector and dropped its plans to limit tax relief on charitable giving that it had announced in its March Budget.
In the end, Chancellor George Osborne said that the Treasury would proceed with a cap on income tax reliefs for wealthy individuals, but that charitable giving would be exempt from this cap.
