Communal charities round on George Osborne over tax plan

Communal charities round on George Osborne over tax plan
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More than 800 top charities, including the British Heart Foundation, the Charities Aid Foundation and Cancer Research UK, as well as the Jewish Leadership Council and Jewish Care, have signed up to the Give it Back George campaign, to persuade the Chancellor to drop his plans, outlined in the Budget.

They warned that the cap, set at 25 percent of a donor’s income if he or she gave more than £50,000, would hurt charities that were already struggling because donations had dried up amid the economic downturn.

The JLC said that the “charity tax”, as it has been dubbed, had “potentially serious implications for charities which benefit from very large gifts. The Government have recognised this and wants to explore with philanthropists ways to ensure the new limit will not significantly impact upon charities that depend on large donations.

“It is important that the Government explore this with charities as well. These measures appear to directly conflict with the Big Society agenda and can only reduce the amount of money that flows into the charity sector during these difficult times. It is probable that the measures will have a disproportionate impact on the UK Jewish charity sector.

“As such we will be co-ordinating discussions between our member charities to formulate an approach to Government. Many Jewish charities will also be involved in the representations being made by the wider voluntary sector.”

Jewish Care CEO Simon Morris noted that his organisation was “disappointed” at the plan. He 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 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. We do not need any barriers to the philanthropic values which make the Jewish community an example of the Big Society in action.”

Many organisations and communal leaders were also quick to latch on to the fact that David Cameron made the “Big Society” a central theme of his 2010 election campaign and government programme.

Sir Ronald Cohen, the chairman of Big Society Capital, Britain’s first social investment trust, said: “It is very unfortunate that the possibility of a reduction in tax relief for donations has been mooted in the budget. However, the prime minister went out of his way to point out that he did not want to see charities affected by a change in legislation. It was a hint that there will be a period of consultation now and I hope that as a result of this consultation the idea will be rescinded. It could certainly have a bigger impact, negative impact, than the amount of money flowing into [Big Society Capital].”

Outgoing UJIA chief executive Doug Krikler said: “I urge the government to explore with philanthropists and charities ways to ensure that this measure will not impact too heavily on organisations that depend on these donations to continue their work.”

The government claimed that there was a widespread problem with the wealthy funnelling cash to bogus charities. But this was dismissed by the Charity Commission, which said it had never been contacted about the issue.

Osborne responded, saying he was “shocked to see that some of the very wealthiest people in the country had organised their tax affairs so that they were regularly paying virtually no income tax”.

And Cameron’s official spokesman then accused major charitable donors of “exploiting” the system to pay less in tax than the average family. “In certain instances they may be giving to charities and those charities don’t, in all cases, do a great deal of charitable work,” the spokesman said.

Communal charities round on George Osborne over tax plan by