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Government performs U-turn on charitable giving cap

The Government has announced that it is dropping plans to limit tax relief on charitable giving.

In the March Budget, Chancellor George Osborne announced the planned introduction from April 2013 of a new maximum limit of £50,000 or 25% of income, whichever was higher, on the amount that a person could give instead of paying it in tax.

However, following widespread criticism from charities and donors, the Government has now announced that it will not be proceeding with the cap.

Mr Osborne said, ‘It is clear from our conversations with charities that any kind of cap could damage donations, and as I said at the Budget that’s not what we want at all. So we’ve listened’.

The announcement is the latest in a series of U-turns on planned changes to the tax regime, including plans to charge VAT on all hot takeaway food, dubbed the ‘pasty tax’, together with plans to introduce a 20% VAT rate on static caravans, which has now been revised down to 5%.

Labour have branded the Government’s recent announcements as ‘shambolic’.