UK charity tax could be stonewalled

Chancellor George Osborne last month announced plans to cap tax exemptions on donations to 25 per cent of the donor’s income if he is giving more than £50,000 to a charity.

However, a ComRes study of 71 Liberal Democrat and Conservative MPs (out of a total 362 coalition MPs) found 65 percent of them believe “tax relief on charitable donations should be exempt from the proposed cap.”

Meanwhile, 90 percent of the MPs questioned, said the government “should do all it can to use the tax system to encourage charitable donations from wealthy donors” rather than discouraging donors by levying taxes.

While the opposition to the plans within the body of the coalition parties represents an intra-governmental vote of no confidence to the plans, they could face a real confidence vote considering the fact that the Labour party has also risen against the plans.

This comes as the proposed tax on donations is another u-turn by Prime Minister David Cameron’s Big Society pledges to increase philanthropy and volunteering.

Former shadow home secretary David Davis said the planned tax is “an assault” on the Big Society initiative, which has been a key element in Cameron’s election manifesto.

AMR/MA/HE

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