Speaking at a National Council for Voluntary Organisations conference, chancellor Gordon Brown said he planned to make good a pledge made in his pre-budget report last November.
‘For every pound that someone gives to charity, the Treasury will add 28p in tax relief,’ Brown said.
Under the plans, the government claims there will be new income tax relief for gifts of quoted shares to charities, and the ceiling on how much employees can donate to charity through the pay packet will be abolished.
But while welcoming the plans, charity experts were not convinced the move will go far enough to ease the tax burden on the sector.
‘It is all very well increasing the income of charities but to be really effective the chancellor needs to tackle the anomaly that as soon as charities spend money they incur VAT which they cannot recover. Unfortunately the measures announced by the chancellor today will do nothing to alleviate the £400m VAT burden borne by charities,’ said Charities’ Tax Reform Group chairman Nick Kavanagh.
Brown was also reported to have said he wanted to make it easier for companies in the UK, who donate only a fifth of what is given in the USA, to give to ‘charity and community activity’.
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