By
Simon Walters and Brendan Carlin
17:00 EST, 14 April 2012
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19:00 EST, 14 April 2012
On the hunt: Chancellor George Osborne, it is said, used his charity tax grab to seek out those rich people who slash their tax bills by donating abroad
Claims that British millionaires are using Romanian charities to make a tax killing on big donations are being investigated by HM Revenue and Customs chiefs.
Well-placed sources say Chancellor George Osborne’s controversial charity tax grab was aimed partly at rich individuals who give money to charities in Eastern Europe, and in particular Romania, to slash their tax bills.
It is believed much of the money is not used for charitable purposes, and in some cases finds its way back to the donors.
In recent years, a vast sum of money has been raised in Britain for charities in Romania after the brutal treatment of orphans and disabled children was exposed.
The Treasury believes that some donors channel large sums to ‘suspect’ Romanian charities to obtain tax relief in the UK. They then use the original donations to fund their own business interests.
Justice Secretary Ken Clarke revealed the Eastern Europe scam yesterday, questioning the level of supervision of charities in former Communist countries.
He said: ‘If you didn’t put a cap on charitable donations, an awful lot of very clever accountants would start using a great deal of ingenuity looking at the charitable allowances to see what you could get there.
‘Most of it is philanthropy, of course, but you can set up a charitable trust in some Eastern European country . . . you can relieve yourself of a lot of British tax doing that.’ Yesterday, Church of England chiefs claimed the Chancellor’s new charity tax relief cap of £50,000 will slash vital maintenance work on major religious buildings – potentially including £4 million of works on Canterbury Cathedral.
Shady: Some donors are thought channel money to Romanian charities to obtain tax relief
The Very Reverend Robert Willis, Dean of Canterbury, said: ‘English cathedrals, which are heritage sites of great importance and to which the Government contributes nothing, have to rely on the generosity of private donors. They will be very hard hit by this huge disincentive.’
Ian Theodoreson, the C of E’s chief finance officer, called the charity cut ‘the fiscal equivalent of carpet bombing’.
He also called on the Treasury to distinguish between donations to legitimate British-registered charities and money transferred to foreign organisations.
He said: ‘If the Chancellor is concerned that the charitable donations are not genuine then there have to be ways of stopping these rogue payments and not take the attitude, which is so often adopted by government, that everyone is on the make so let’s hit the innocent as well as the guilty.’
Mark Astarita, head of fundraising for the British Red Cross, also accused Mr Osborne ‘of using a sledgehammer to crack a very tiny rotten nut’.
He added: ‘In the meantime generous people are tarred with this unkind brush as if they only gave for tax breaks. Nothing in my opinion could be further from the truth.’
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If we didn’t have all these tax breaks, most of which only the wealthy can use, our tax system would be easier to understand and the Inland Revenue better run. Best of all, it would be the precursor to big tax cuts for everyone. Charities get enough breaks as it is.
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The lunacy of British politics laid bare !
Here we have the Chancellor complaining about rich people legally avoid tax as any sane person would yet he is the very person that sanctions the laws used. If he doesn’t like them doing it then change the law allowing it.
I have never understood the reasoning of the British cabinet. The party gets elected then promotes MP,s into cabinet positions of which they generally have no previous experience or special skills. Why do you not have experienced ex police officers made Home secretary ? Ex generals made defence minister etc. The UK is being made to look like some third rate banana republic by this farce !
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The fact the chancellor of the exchequer George Osbourne who holds possibly the most important economic based position in the UK has no economic based higher qualifications whatsoever shows modern British politics for the complete farse that it is. It has never been more evident, its not what you know, its who you know.
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Why not have a committee to approve any donation over £50000? Surely a very small team of MPs could meet and approve donations- there can’t be that many each week! It should be very easy to direct all money to genuine charities. (ps I’m available for govt think tanks!)
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Is no one honest any more…i really despair? :*(
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Well if certain individuals are creating Charities to pay themselves – then those people should be investigated! There are genuine charities who will suffer because of this nonsense ruling which must be overruled! In some areas if you want free legal advice, there are advise centres which are run by Charities who rely on large donations [because they receive no Government funding and are also the last resort for people who cannot get Legal Aid because they earn just above the threshold]; Help the Aged are also a Charity which helps people aged 50 or over. They are also Youth Charities which will also suffer.
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So it’s taken around a week for this wretched government to come up with some ‘evidence’ to back up their idiotic idea to block tax relief for those who give away money.
If these ‘charities’ referred to are not legitimate , why does the ‘charity commision’ continue to recognise them. The ‘charity commision’ is , I beleive a quango run by a typical labour placewoman who has somehow retained her job under the current diabolical regime . She is only too happy to claim private schools are not charities, so why are these dodgy overseas organisations given the all clear?Perhaps she should be sacked and the organisation run by someone competent? – over to you Dave!
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Did you know that George Osborne has no higher education qualifications in Economics or Maths, not even been on an HND course or even attended night school Mmmmmmm!!!!!!
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Hmm fancy that then !! who would have guessed….what was that charity called again oh yes Atlantic Bridge…could they look at that too..
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