Charities fight Budget change on big donors

By Simon Rocker, March 29, 2012

The Jewish Leadership Council intends to lobby Chancellor George Osborne over plans to reduce tax relief on big donations, which it fears could have a significant impact on Jewish charities.

In last week's Budget, Mr Osborne announced proposals to cap tax relief on charitable contributions at £50,000 or 25 per cent of a person's income - whichever is the higher.

Chief executive Jeremy Newmark said the JLC was "collecting data from the major charities to quantify the impact. We will be making an approach to Mr Osborne once we've got the data."

The Charities Aid Foundation, which has urged the Chancellor to rethink, has warned that large donors could end up giving less, noting that £11 billion of charitable income last year in the UK came from just seven per cent of donors.

In a Lords debate on the Budget last Thursday, JLC vice-president and Conservative Party treasurer Lord Fink called for government intervention to help charities affected by the cap.

"I chair several charities and I know that many philanthropists who support them give more than 25 per cent of their income to them," he said. "I also know that one or two of the charities that I support would not be able to operate without that generous support of the wealthy."

The CAF offered an example to illustrate the potential effect. "Felicity Culture-Vulture earns £800,000 and is a 45 per cent rate taxpayer. She makes a lump sum gift of £1 million to a local museum to help build a new education centre. Through Gift Aid, the donation is worth £1.25 million to the museum after basic rate tax has been reclaimed.

"Under current rules, Ms Culture-Vulture is then able to claim back £312,500 in personal tax relief for herself, which she plans to give to other causes.

"However, under the new rules, her tax relief would be capped at 25 per cent of £800,000, that is £200,000. This means that she - and the other causes she supports - would lose out on a potential £112,500."

Jewish Care chief executive Simon Morris said the proposal "could have a potentially dramatic impact on very large gifts to charities and Jewish Care is working with other communal and national charities to put the case to government. We sincerely hope they will reconsider the proposal and recognise that, at a time when charities are squeezed on all fronts, donors need to be encouraged to give."

UJIA chief executive Doug Krikler wanted the government to explore ways "to ensure that this measure will not impact too heavily on organisations that largely depend on these donations to continue their work".

Mr Morris was also unhappy about plans to freeze allowances for pensioners, saying it would "impact on older people's ability to pay for care at a time when they need support the most and when charges are having to be increased due to inflationary pressures".

Last updated: 5:50pm, March 29 2012