The Community Foundation Network has produced figures suggesting that the tax relief cap will cost charities £1bn while only producing additional tax receipts for the government of £200m.
In a letter to the Evening Standard yesterday, CFN’s chair Matthew Bowcock wrote: “We estimate that if you add together those who would have given and others discouraged from becoming donors, the charitable sector would be £1bn worse off while HMRC would gain only £200m.
“You have to ask what’s better for Britain,” he stated.
Bowcock also estimated that the 57 community foundations that fund small local charities and voluntary groups across the UK stand to lose around 20 per cent of their donations if the measure goes through.
More charities and MPs condemn proposal
Meanwhile, voices as diverse as Business Secretary Vince Cable, Tory MP David Davis, Oxford and Cambridge universities and Macmillan Cancer Support have all waded in to the row today.
Macmillan has warned that the proposed limits would affect its fundraising efforts for its new cancer centre, while the two universities have each written privately to ministers to express their concerns about the likely impact of the cap on alumni fundraising.
A spokeswoman for Cable said that he had been lobbied by universities about the proposal and would be taking their concerns to the Treasury. And David Davis told The Guardian: “If the government’s aim is to prevent tax avoidance, it would be better to ensure donations are approved by the Charity Commission. Or if the charity is based abroad, it should be subject to review by [HMRC]. If the government’s aim is simply to raise money from philanthropists, the government should say so.”
Arts Council England said the measure put at risk more than £80m in regular donations to its funded organisations.
Messages out of the government continued to confuse. A spokesman from Charity Tax Group said the government “seems to yoyo every day about which way it will go”.
John Low, CEO of Charities Aid Foundation, added: “Ultimately, it will not be the rich who will lose out. It will be the most vulnerable people in society, and the other causes charities support.
“The time has come for George Osborne to listen to the many voices inside government and among charities and donors, who are saying clearly that he should now think again.”
