Give it back George

Drop the charity tax

Give it back, George-drop the charity tax
NCVO, Charities Aid Foundation and Philanthropy Review are leading a campaign to challenge the cap on income tax reliefs announced in the Budget, which would for the first time limit the tax effectiveness of charitable giving through Gift Aid. Under this proposal, an individual’s gross donations over £50,000 per year or over 25% of an individual’s income (whichever is greater) will not attract tax relief. The VCS – and many foundations and other funders – are certain that this will damage the amount of charitable giving and the Chancellor’s and Prime Minister’s explanations for proposing this cap are causing outrage all over the sector. Giving through Gift Aid is being described by the Chancellor as tax avoidance and the PM has implied that the cap is needed to deter people from giving to dodgy (or foreign) charities. See the campaign website Give it back, George-drop the charity tax  for many clear responses to those two points and an  opportunity to sign up to the campaign.

Arts and heritage organisations and many larger charities of other kinds rely on big gifts of income, and most often the amount given reflects the donor’s awareness of the tax reclaim that will be added to what he or she gives. For foundations – including community foundations – big donations through Gift Aid add to their capital and therefore their grantmaking capacity (as NCVO’s Stuart Etherington says, “today’s gifts are tomorrow’s grants”). 

In a survey of more than 200 philanthropists carried out by the Charities Aid Foundation, 80% of major philanthropists said giving will be affected by this cap. Read more here.

In a powerful letter to David Cameron, Dame Stephanie Shirley, a major philanthropist and Ambassador for Philanthropy describes “these vague and ill considered proposals…” which are “already discouraging major giving, with donors informing charities privately of their intention to put on hold plans to give five-, six- or even seven-figure sums”. She also notes that these “naïve proposals… will, if enacted, significantly hamper the work of many charities, large and small, as almost half of all giving comes from just 7% of donors through significant giving”. Read her letter here


Art work: "Give it Back" by John Robertson