Should George Osborne reverse the cap on income tax relief for charitable donations?


Sir Stuart Etherington
This proposal needs an urgent rethink before it does irreversible damage. Major donors face at least six months of confusion and charities are already losing gifts as a result. High-level donations form a significant proportion of voluntary income, and framing tax relief on donations to charity as a tax avoidance measure betrays a serious lack of judgement. The generous should be supported, not pilloried. Nearly 1,000 organisations have signed up to the “Give it Back, George” campaign, voicing fears about the impact that the cap could have on their ability to deliver vital projects and services. It’s not just “household name” charities that stand to lose out; small grassroots organisations, and a range of faith groups, cathedrals, arts organisations and universities, are putting up a united front. In these challenging times, we need more philanthropy, not less.

Stuart Etherington is chief executive of the National Council for Voluntary Organisations.


JP Floru
The charitable donations incident deflects from the tragedy of zero growth. Instead of the Treasury’s increasingly desperate measures to go after the last crumbs, it should allow the pie to grow. That means we shouldn’t reverse Osborne’s decision but go further, replacing our complex system of reliefs with a flat income and corporation tax rate of 15 per cent. Excessive tax avoidance results from excessive tax levying. If taxes were reasonable, nobody would bother avoiding them. The light of aspiration and prosperity would wake up the country from its slumber and create a sustainable economic boom in no time at all. Jobs and hope would replace dole and dependency. The poorest could finally climb the ladder without the need for charity or government hand-outs. With the increased tax receipts we could start paying back the national debt. It has been done before; it can be done again.

JP Floru is senior research fellow at the Adam Smith Institute.