Any optimism among charities that the government might  reform the tax system to encourage philanthropy from higher-rate taxpayers was significantly dampened last night when both a peer and a Cabinet Office representative spoke of government reticence to implement change.  

Calls rang out from the audience at the EAPG roundtable on the Giving Green Paper that the current system of reclaiming gift aid for higher-rate taxpayers is overly bureaucratic and thus discourages many of those earners from claiming back their gift aid and subsequently gifting that rebate to charity.

But the Treasury is not inclined to implement any changes, according to crossbench peer Lord Robin Janvrin (pictured).

Lord Janvrin told the room that he has been privy to communications from the Treasury to the effect that there is a generous system in place already, and that taxpayers and charities simply need to use it.

A 'lack of evidence'

There was also considerable support for lifetime legacies to be introduced in the UK - a proposal not included in the Green Paper, said the Cabinet Office’s Sophia Oliver, because of a lack of evidence that the system would work in this country.

This was not true, said Sue Daniels, executive director of EAPG. The EAPG has long lobbied for a lifetime legacies regime and Daniels said the organisation had provided government with a significant amount of evidence on the potential worth of the implementation of such a tax instrument.

Simon Weil, partner at Bircham Dyson Bell, also jumped on Oliver’s “lack of evidence” claim.

“To require evidence is to set an impossible task,” he said, because the only evidence available is from the US and the government does not accept it as relevant. He said that lifetime legacies would provide a major incentive for giving.

“There is no doubt in my mind, and among the adviser community, that tax incentives and reliefs would make it easier to promote giving as part of our repertoire of advice,” he said.

“We don’t believe it will be burdensome [for government].”

Lord Janvrin, also deputy chairman of HSBC Private Bank, said that the Green Paper indicated that “philanthropy is high on the political agenda”, but said the general lack of fiscal incentives included within its pages was an “elephant in the room”.

“Don’t let’s forget how important major donors are,” he cautioned.