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Full consultation for controversial charity tax relief changes

 

The Government will launch a consultation this summer on its controversial plans to cap tax relief on charitable donations.

 

Downing Street said it was considering ‘various’ ways that it could introduce a cap, adding that a consultation would begin after talks with individual charities.

 

It follows criticism from some charities and philanthropists, who argue that the proposed changes could lead to a fall in charitable donations.

 

Currently there is no limit on the amount of income tax relief that can be claimed, meaning that those who donate to charity may effectively reduce their tax bill to zero.

 

However, from April 2013 the maximum tax relief available will be restricted to £50,000 or 25% of an individual’s income, if that is higher.

 

‘It is necessary to work very closely with charities and philanthropists to make an assessment of how much less is given to charities as a consequence of this,’ said Treasury minister David Gauke.

 

‘We have yet to discuss how it will be implemented. There are various options on the table and we are going to discuss them,’ the Prime Minister’s spokesman said. ‘We want to ensure we don’t impact on charitable giving.’