Charities and philanthropists are calling on Chancellor George Osborne to reverse plans to cap tax relief on charitable donations, warning that the measure could significantly reduce giving. The cap, announced in last month's Budget, limits tax relief to £50,000 or 25% of income, whichever is higher, from 2013.
Matthew Bowcock, chair of the Community Foundation Network (CFN), estimates the cap could cause a 20% drop in donations to his organisation. He argues that tax relief for charitable giving is different from other allowances, as donors give away more than twice what they save in tax. "Britain needs these people to share their wealth more than ever," he said.
The National Council for Voluntary Organisations (NCVO) warns that nearly half of all individual donations come from just 7% of donors, most of whom are higher-rate taxpayers likely to be affected. Chief executive Sir Stuart Etherington called the cap a "dire consequence" for charities, arts organisations, and faith groups, and criticised government attacks on donors.
However, smaller charities like Cardiac Risk in the Young (Cry) say they are less reliant on large donations. Chief executive Alison Cox MBE noted that Cry's funding comes mainly from bereaved families' fundraising efforts. Maralyn Bowen, who raised £450,000 for Cry after her son's death, said the charity depends on events like marathons and quiz nights.
Oxfam's finance director Bob Humphreys said the cap could influence high-level supporters' thinking and potentially affect long-term relationships with communities. The RNLI, which relies heavily on donations and gifts in wills, also expressed concern. Both organisations have joined calls for the chancellor to exempt charitable donations from the cap.
