Treasury rebuffs Tory charity proposals
The Treasury has rejected a series of Tory attempts to widen chancellor Gordon Brown's proposals to widen tax concessions for charitable giving.
The Treasury has rejected a series of Tory attempts to widen chancellor Gordon Brown's proposals to widen tax concessions for charitable giving.
Proposals pressed by Treasury spokesman Howard Flight included lifting the £250 ceiling on the aggregate value of benefits a charity could make available to gift aid donors and allowing notional tax to be added to gifts from non-taxpayers.
He also wanted companies’ dividends on shares held by charities to count as donations, enabling donors to gift shares while reserving the income from them for their lifetime and that of their spouses and extending the range of qualifying shares to private companies.
Economic secretary Melanie Johnson said the government’s concessions already go further than they proposed in last year’s Gift Aid consultation document and had been ‘warmly received’ by charities like Oxfam as a means of increasing donations.
But she insisted most people give out of a desire to support a worthy cause – not for what they can get – and insisted the link with the tax paid by the donor be kept. She warned that abolishing the £250 limit imposed by the last Conservative government on allowable benefits could open the door to avoidance – such as a means to pay school fees.
Johnson said dividends to charities could not qualify because they were not gifts. She said the scheme was designed to allow a tax deduction forthe full market value on shares or securities on they day beneficial ownership was transferred, and charities would not be able to use gifts for charitable purposes if they could not readily realise the value of unquoted shares or those placed in a remainder trust.
Flight warned that the ‘ridiculously low’ ceiling on benefits in return would hit gifts from companies making use of membership sponsor schemes enabling donors to take guests to concerts and the like.
He claimed charities had been mislead into believing members of schemes could receive up to 25% of the value of covenanted donations in return and damage events like the Three Choirs Festival and musical charities in particular.
Payroll giving scheme changes allow donations to reach charities sooner