In the Budget, the government had proposed to restrict tax relief on payments that are unrestricted to the greater of £50,000 or 25% of income per individual. his was due to take effect from 6 April 2013. This was to have applied to charitable donations as well as to other payments. On 31 May, following extensive campaigning by lobby groups, the government announced that it would exempt payments to charities from the cap on income tax reliefs that had been proposed in the Budget. The new announcement which will preserve unrestricted tax relief for charitable donations has been hailed as a victory by charities and lobby groups that had campaigned for charitable donations to be exempt from the cap. The relaxation is of huge significance to many not-for-profit organisations that rely on major donors to fund their philanthropic work.
According to the last Sunday Times Giving List 2011 the top 100 donors gave a total of £1.67 billion to charity, claiming millions of pounds of tax relief through the Gift Aid system.
If you have a query regarding charity tax or VAT please contact a member of our Charities Group.