Today it was announced by the UK Treasury that the controversial plans to restrict tax relief on charitable donations have been ditched by Chancellor George Osborne.
The cap – which limited relief at £50,000 or 25% of income – was proposed in Mr Osborne’s March 21 Budget caused outcry among many charities which stated that they would lose a substantial proportion of their income as the cap would deter many from making donations.
Mr Osborne said however that he would still proceed with a cap on income tax reliefs for wealthy people which do not relate to charitable donations.
Since the original announcement, the Treasury has been in discussion with a number of charities and big donors to ascertain exactly what impact the move could have on charity income. he discussions took place as more than 1,000 charities signed up to a call by the Charities Aid Foundation (CAF) for the Government to think again.
Mr Osborne said on the news today “I can confirm that we will proceed next year with a cap on income tax reliefs for wealthy people, but we won’t be capping relief for giving money to charity.”
Mr Osborne was said to have written to charity sector representatives to inform them of the decision.
This can only be good news and a big relief to 1000s of charities in the UK who were facing possible closure or service curtailment as a result of the cap – times are tough enough for the non-profit sector without donations becoming subject to dis-incentive.