Charities relieved as Osborne drops plan for tax relief cap

Communal organisations are breathing a sigh of relief following the government’s U-turn on a controversial plan to cut tax relief on charity donations.
Many Jewish charities had spoken out against the proposal to limit tax relief on donations at £50,000, or 25 per cent of income.
Norwood chief executive Elaine Kerr estimated that the cap could have cost the charity £200,000 annually. “Within the current unpredictable and challenging economic climate, uncertainty of this kind has been very unhelpful, both for Norwood and for our generous donors. Norwood is already seeing its statutory income falling year-on-year. Maintaining and developing additional voluntary income is critical for the many thousands of vulnerable children and adults we support.”
Although Norwood had not seen a change in large contributions in the two months since the Budget, Ms Kerr said this could be attributable to people bringing forward their donations “to beat the introduction of the proposed cap in April 2013”.

She pointed out that Norwood “have had to use resources to identify what the effect might be and to lobby the government. We joined the campaigns in the charity sector and used social media to fight the proposed tax cap, as well as directly lobbying MPs to put pressure on the government.”

Manchester’s largest Jewish charity, the Fed, said the donation cap would have severely impacted on a £12 million capital investment programme for its Heathlands Care Village and headquarters in Prestwich. “Whatever the government do to help is big news for us,” said Fed treasurer Bernie Yaffe. “We have got a real challenge in terms of the shortfall in local authority funding.”

Leeds Jewish Welfare Board president Edward Ziff said that “a cap could have hurt the board, especially if bequests would have been affected”.

He added: “There is a squeeze on how many charities our relatively small community can support.

“A number of donors have diverted money away from the welfare board to other appeals. I’m not saying others are not in need of support, but the board needs as much support as we can get.”

Jewish Blind and Disabled chief executive Hazel Kaye said major donors had been “very concerned” since the Budget. “It is difficult enough to manage without receiving any positive help from government in the form of funding without having them make our fundraising activity even harder than it already is.”

Board of Deputies chief executive Jon Benjamin said that “those who give to good causes should not have had their philanthropy treated as some kind of tax avoidance scheme”.

    Last updated: 3:45pm, June 7 2012