Tax Policy Vision Must Be Clearer

Article excerpt

Byline: TIM MALLON

THE Government announced on May 30 they would not implement the proposal made in the 2012 Budget that a cap would be placed on the tax relief available when charitable donations are made by an individual.

The measure was included as part of the Government's agenda aimed at preventing income tax avoidance by exploiting "uncapped tax reliefs". It was proposed that a cap would be set on donations qualifying for relief at 25% of income or pounds 50,000, whichever is greater.

The announcement that the proposal would not be implemented followed negative reaction to the plans. According to a survey of more than 200 philanthropists carried out by the Charities Aid Foundation, eight out of ten said giving would be affected by these proposals.

Nearly half of the donors, all of whom have, on average, given over pounds 50,000 a year to charity in the last three years, said the tax changes could have forced them to cut donations by more than 40%, while 83% of donors said that the changes would be bound to reduce philanthropic donations overall.

The announcement followed earlier ones amending the "pasty tax" and "caravan tax". …