The government has unveiled plans to conduct a formal consultation over the summer into the proposed cap on tax relief on charitable donations.
The move follows an outcry from charities and philanthropists, who said that the cap would lead to a drop in donations.
In his March budget, George Osborne announced proposals to restrict the tax relief on charitable giving to a maximum of £50,000, or a quarter of a donor’s income if that is greater.
A Treasury statement said: “This government believes it is not right that taxpayers with very high incomes should, year on year, pay little or no tax as a result of unlimited reliefs.”
The National Museum Directors’ Conference (NMDC) expressed concern about the plans, saying its members were worried about the potential impact of the policy, which it said would affect many museum donors.
David Spence, interim director of the Museum of London, an NMDC member, said: “Like leaders of many museums and charities that rely on the generosity of individual patrons, I am concerned that plans to introduce a limit on uncapped income tax reliefs will deter some donations.
“The coalition needs to demonstrate a commitment to philanthropy, especially if museums continue to be seen as a valuable part of the Big Society.”
Meanwhile, a recent survey by the Charities Aid Foundation of almost 200 philanthropists who have given more than £50,000 annually to charity over the past three years, showed that 83% believed Osborne’s plans would reduce donations.
A £1m donation by Hamish Parker, a fund manager, enabled the British Museum to acquire Picasso’s Vollard Suite of prints last year.
Parker said “the government is obfuscating the issue. In effect, it is taxing museums and charities”.
The government stressed that it was “committed to exploring with the philanthropy and charity sectors ways to ensure that this change does not significantly impact on charities which depend on large donations”.
Update
31.05.2012
The government announced that charitable donations would be excluded from the cap on tax relief.
The move follows an outcry from charities and philanthropists, who said that the cap would lead to a drop in donations.
In his March budget, George Osborne announced proposals to restrict the tax relief on charitable giving to a maximum of £50,000, or a quarter of a donor’s income if that is greater.
A Treasury statement said: “This government believes it is not right that taxpayers with very high incomes should, year on year, pay little or no tax as a result of unlimited reliefs.”
The National Museum Directors’ Conference (NMDC) expressed concern about the plans, saying its members were worried about the potential impact of the policy, which it said would affect many museum donors.
David Spence, interim director of the Museum of London, an NMDC member, said: “Like leaders of many museums and charities that rely on the generosity of individual patrons, I am concerned that plans to introduce a limit on uncapped income tax reliefs will deter some donations.
“The coalition needs to demonstrate a commitment to philanthropy, especially if museums continue to be seen as a valuable part of the Big Society.”
Meanwhile, a recent survey by the Charities Aid Foundation of almost 200 philanthropists who have given more than £50,000 annually to charity over the past three years, showed that 83% believed Osborne’s plans would reduce donations.
A £1m donation by Hamish Parker, a fund manager, enabled the British Museum to acquire Picasso’s Vollard Suite of prints last year.
Parker said “the government is obfuscating the issue. In effect, it is taxing museums and charities”.
The government stressed that it was “committed to exploring with the philanthropy and charity sectors ways to ensure that this change does not significantly impact on charities which depend on large donations”.
Update
31.05.2012
The government announced that charitable donations would be excluded from the cap on tax relief.