U-turn as 65% of Coalition MPS shun charity grab
TWO-THIRDS of Coalition MPS want George Osborne to drop his controversial charity tax grab, a survey revealed last night.
And it seems they will get their way after ministers signalled an impending climbdown on the issue.
The Comres survey of MPS, commissioned by the Charities Aid Foundation, suggested the Chancellor would have to move swiftly on the issue to avoid a fullscale rebellion by his own MPS.
Of 71 Conservatives and Liberal Democrat backbenchers, 65 per cent agreed that ‘tax relief on charitable donations should be exempt from the proposed cap’. The poll reflected widespread discontent on the Government benches with the Budget measure, which has been condemned by hundreds of charities.
Conservative MP Zac Goldsmith yesterday said he was ‘ashamed’ that his party appeared to have ‘declared war’ on the
‘A brake on philanthropy’
very people who should be at the heart of the Government’s Big Society project.
Former Tory leadership contender David Davis said the measure, which would cap tax relief for charitable donations, was a ‘tax without friends’.
And Conservative Party treasurer Lord Fink, one of the country’s most generous supporters of good causes, said that ‘by definition’ the move would slash the amount of money charities receive.
A philanthropic organisation with close links to Prince Charles also warned that the new cap would reduce giving. Philip Spedding, director of Arts and Business, said: ‘I would be very surprised if the prince didn’t share everyone’s concerns about the developments because he’s someone who cares very passionately about culture and encouraging people to give. I can imagine he would find it worrying.’
The new proposals would cap the amount an individual can give to charity before incurring tax at £50,000 a year or a quarter of total income, whichever is higher. Ministers claim the scheme remains ‘generous’ and will prevent abuse by individuals who give money to questionable charities, often abroad, to avoid tax. The Treasury argues that some wealthy individuals are able to cut their income tax liability to almost nothing by making donations to sometimes dubious charities. However Foreign Secretary William Hague said the Treasury was ‘looking at’ ways to reduce the impact of the measure on genuine charities.
Deputy Prime Minister Nick Clegg defended the scheme, saying it was ‘not right’ that some super-rich individuals were able to exploit the reliefs to cut their income tax bills ‘to almost nothing’.
The proposal is part of a so- called ‘Tycoon Tax’ initiative championed by Mr Clegg to ensure the rich pay at least a minimum rate of income tax.
But former Lib Dem leader Sir Menzies Campbell said it risked damaging universities, which rely heavily on big donations from wealthy individuals. Almost 1,000 charities have now come out publicly against the charity cap, as has the Lib Dem Business Secretary Vince Cable. In an open letter yesterday, 46 wealthy donors including members of the Sainsbury family urged a rethink.
‘The proposal is a brake on philanthropy that may deter future donors,’ they wrote. ‘It is confusing and dispiriting, and we urge the Prime Minister and Chancellor to think again.’