Suffolk: Charities’ fear over giving tax cap

CHARITY bosses in Suffolk fear their funding will be hit hard if the Government presses ahead with a tax relief cap for giving to good causes.

In its Budget announced last month to rein in reliefs claimed by the rich, the Government unveiled measures which it hopes would bring in �300million in extra revenue each year.

But charities fear the moves – which would limit income tax reliefs to �50,000 or 25% of income – will put philanthropists off giving.

And Chancellor George Osborne has also been under pressure to abandon another plank of his Budget, amid warnings that his so-called “heritage tax” would cost churches tens of millions of pounds. Church leaders have called on him to rethink his plans to end the VAT exemption for improvement, alteration and restoration works to Grade I and Grade II listed buildings.

One concerned Suffolk charity is St Nicholas Hospice Care, which at any one time provides support to about 200 people with terminal illness in the west Suffolk area.

Its fundraising and marketing director Kevin Clements said: “It is a huge issue for us – it is quite scary. We need to be making it easier for people to help us rather than harder. People are going to be put off.”

As the purse-strings had tightened for the public, the charity had been trying to attract larger donations as well as applying for funding from foundations or grant-making bodies. “It is hard at the moment and we are really lucky with the support that we get from the community,” said Mr Clements. “But with the larger donors you get a bigger bang for your buck and we are out there working on trying to develop that income.”

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Workwise Suffolk, which trains people with mental illnesses, and Age UK Suffolk also fear the cap would have a crippling effect on their work in the community.

Workwise Suffolk chief executive Valerie Beresford said: “It’s the beginning of a very slippery slope. We are reliant on grant-making trusts which people donate into, especially since funding from local authorities has been reduced.”

Age UK Suffolk chief executive Daphne Savage said: “Government should be looking for more effective ways to assist charities, large and small, as we have been the big society for many years and are more desperately needed now than ever before.”

A Treasury minister yesterday accepted that the introduction of the cap would have an impact on charities. Exchequer Secretary David Gauke said the measure was expected to bring in �300m of additional revenue across the range of reliefs, of which between �50m and �100m would come from the charities cap.

A full consultation will be held, with the results expected to be published in the summer. A Downing Street spokeswoman said Prime Minister David Cameron wanted to encourage charitable giving, but declined to say whether he agreed with Mr Gauke that the proposed cap would reduce donations.