Friday, 1 June 2012

Turn, Turn, Turn - at last, common sense prevails on charitable donations

There's been a little bit of good news for charities this week, as George Osborne quietly dropped plans to cap tax relief on charitable donations. If carried to law, this would have put a sizeable dent in the revenue stream of charities that are already struggling with a brutal regime of funding cuts.
As I mentioned when The View From The Pier first reported on the Chancellor's plans, inhibiting tax relief on donations in this way would have been the final straw for some charities, at a time when they were being asked to take up much more of an active role in community work. As well-off donors abandoned them, they simply wouldn't have been able to cope financially. But the plan was badly-thought out from the start, and targeting the wrong sector. Let's be clear, gift aid and the current rules on charitable donations are not tax dodging - tax payers don't make any money for themselves using the loophole. They are simply ensured that all their money is going to the right place.
One could be churlish and point out that there's never been any question of capping donations to political parties - who similarly depend on large contributions from a small number of wealthy donors. Wealthy donors who also put a lot of money into charities. But let's be (if you'll excuse the pun) charitable, and just be grateful that young George has seen sense.
In a week of U-turns, this has been a most welcome change of direction. Celebratory pasties for lunch all round.

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