“Let’s be perfectly clear, this loophole is to prevent rich people from giving so much money to charity as a tax dodge”.
I’m sure someone has said those exact words, because the amount of this type of BS, that has been filling the media arc, appears to be just this side of the argument.
The other side comes from the rich people and arts charities saying that the result is going to be massively cut down donations and income.
Most recently the Government has countered with pointing out that people can still give as much as they like to any charity they like, they just won’t get the tax relief after the total reaches £50,000 or a quarter of their income, whichever is the higher.
Still no one seems to explain how tax relief works in this instance.
It does not mean that each fat cat gets some ‘optional relief’ from Ms Whiplash for free, every time they push £100k into Eton’s registered charity coffers*
(*Oh yes, Eton, like nearly all private schools is a registered charity, and oh yes, Ms Whiplash knows this)
It means that those who pay tax on incomes that are well over quadruple the national average do not get to choose to force the taxpayers (themselves and the rest of us) to contribute from our net tax pot contributions to the charities of their personal choice.
i.e. When a fat cat donates £100k to Eton for them to develop swimming facilities, the tax office will not now add 50% of that amount on top.
The taxpaying rich of course see this as being “their money” that the tax man has unjustly taken from them, and that the system as it stood rightly makes the tax man give it back to the charity that they have chosen.
Is this making sense?
So, given the nature of these very rich men and the charities they tend to sponsor, I am with the government in not allowing these excessive donations to have this degree of tax relief – but I am also in favour of encouraging proper charitable funding to the charities that are in need of such income in order to survive, which some of them may now have difficulty with, following withdrawal of direct (tax based) grants from government. What to do?
Allow certain charities to appeal to a government committee for exceptional tax relief on large donations from philanthropists. These charities would not include the private schools of Britain, they would not include any offshore charities whose beneficiaries have the same surname as the massive fat cat donor, nor would they be Donkeys for the Blind in the Orkneys. They would include the public-facing major arts and Health & Wellbeing charities that the government has reduced direct funding toward over the past 20 years.
Plug the loophole, help the best charities.
I thank you.