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Government may offer concessions on charity tax relief

Chancellor George Osborne is ready to soften his stance on plans to limit tax relief on charitable donations but will not exempt donations from the cap altogether, according to the Financial Times.

The FT reports Osborne is considering two different plans to water down the proposed cap, currently set to limit uncapped tax reliefs such as charitable donations to £50,000 per year or 25 per cent of income, whichever is higher.

One is to increase the limit on charitable donations to 50 per cent of a person’s income, the other is to allow donors to roll any unused tax reliefs into future years if used for donations.

It is estimated that raising the ceiling for charitable donations to 50 per cent would cost £40m, meaning the cap on charity tax relief would save the Government just £20m.

Speaking to the FT, financier Jon Moulton says: “The main thrust of the Conservative manifesto was that individuals should do more and the government should do less. This is a breach of the thrust of the manifesto.”

Osborne is under significant pressure from Conservative and Liberal Democrat backbenchers who are calling for a U-turn on the policy.

A survey of 71 per cent of Tory and LibDem MPs by the Charities Aid Foundation shows 65 per cent believe charitable donations should be exempt from the cap.

Conservative backbencher and former Shadow Home Secretary David Davis has branded the cap “an assault” on David Cameron’s Big Society while Foreign Secretary William Hague yesterday said the Government would be “very sympathetic” to concerns.


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There are 2 comments at the moment, we would love to hear your opinion too.

  1. East answer is to only allow tax relief on donations to carities who spend the vast majority of their income in Britain. This would mean our national wrath is spent here and not abroad. A laudable use of money not sucked into the treasury for benefit payments and military adventures abroad.

  2. Easy answer is to only allow tax relief on donations to carities who spend the vast majority of their income in Britain. This would mean our national wrath is spent here and not abroad. A laudable use of money not sucked into the treasury for benefit payments and funding military adventures abroad.

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