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Treasury reverses charity donations cap

The proposed cap on charity donations has been abandoned by the Treasury

The Treasury has reversed its decision to place a cap on charitable donations made in the budget.

The Chancellor George Osborne had announced a new limit on the amount that an individual could donate to charity and claim against tax. The intention was to close what the Treasury saw as a loophole allowing donations made to 'bogus charities' to deliberately reduce tax liabilities by the wealthy.

However the measure proved to be extremely unpopular with charities who estimated a potential loss of billions of charity donations and who launched a campaign called 'Give It Back George' to get the measure reversed. The policy was also opposed by many MPs including those in the Conservative Party, and by leading philanthropists who objected to what they saw as an attempt by government to suggest they were attempting to dodge paying their fair share of tax.

Following the negative reaction the Treasury initially intended to change the rules by raising the limit for donations but this was met with much resistance from charities who demanded a total reversal in the policy.

Speaking to the media today the Chancellor George 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."

Reacting to the decision Sir Stuart Etherington, Chief Executive of the National Council for Voluntary Organisations, said: "We are delighted that the Chancellor has listened to reason and pledged to drop the charity tax. This is a victory for common sense and validates the strength of feeling from the thousands of organisations who lent their weight to the Give it Back, George campaign. This is a great day for philanthropy."

 

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