Mark Pritchard, secretary of the backbench 1922 Committee, said: “This appears
to be going in the opposite direction of encouraging philanthropy and major
giving to charity.”
Ministers say the change will prevent abuse of the tax code by wealthy people.
Charities have said it will deter philanthropists and lose them millions of
A new survey suggests that nine of 10 charity leaders believe the Coalition’s
plans will reduce donations.
The Charities Aid Foundation said the majority of charities were expecting the
value of major donations to fall by at least 20 per cent when the rules take
effect next year. John Low, the charity’s chief executive, said the survey
showed “the widespread alarm and despair among charities” over Mr Cameron’s
Mr Cameron said the changes were necessary because of “abuse” of the rules,
often involving donations to charities registered outside the UK. “Some
people have been using charities established in other countries to funnel
money in, to get their tax rate so they’re not paying 50p tax or 45p tax but
in some cases 10p or 20p tax. I think that isn’t right,” he said.
Mr Cameron later told ITV News he would meet charity leaders to discuss the
plans before they are published – in the form of draft legislation – in the
Whitehall sources said work was being done to make sure the proposals are
targeted at wealthy people who are using foreign charities to avoid paying
Government sources insisted there was no prospect of a retreat from tightening
up tax relief, but said the rules could treat Britain and foreign charities
“We want to end the abuse involving foreign charities, but that is different
to big established British charities raising large sums of money – that is
not something we want to hinder,” said a source.
Treating donations to foreign charities differently would be “extremely
complicated” but is a “possible scenario”.