Fears grow over planned cuts to charity tax

UK Business Secretary Vince Cable has joined the growing political backlash against Treasury plans to cut tax relief on charity donations, warning that the move could hurt British universities, writes James Kirkup for The Telegraph.

The Liberal Democrat’s public questioning of the policy has added to pressure on George Osborne to soften his plans to restrict tax relief on donations. Cable’s intervention – which will further strain relations between Conservative and Lib Dem ministers – came as more Tory MPs raised concerns about the plans. Currently, higher-rate taxpayers donating to a charity can reclaim more than half of the tax. From April 2013, the maximum will be £50,000 (US$79,700) per year, or 25% of the individual’s income.

Ministers say the change is needed because some rich people are abusing the reliefs to cut their income tax bill. A spokesperson for the business secretary said he “fully supports the need to clamp down on abusive tax avoidance but this should be separated from genuine charitable giving”.
Full report on The Telegraph site