Art Fund calls on Government to drop plan to cap charitable donations

  • 12 April 2012

The Art Fund has joined forces with other charities to call on the Government to drop its plan to introduce a cap on tax relief on donations to charity

The Procession to Calvary by Brueghel the Younger, saved in 2011 thanks to charitable donations

The Procession to Calvary by Brueghel the Younger, saved in 2011 thanks to charitable donations

The Art Fund has joined forces with other charities to call on the Government to drop its plan to introduce a cap on tax relief on donations to charity. Director Stephen Deuchar said the plan would have a ‘devastating impact’ on planned fundraising appeals.

The Chancellor announced in the March Budget that from April 2013 tax relief on charitable donations will be capped at £50,000 or 25% of income. This will deter the most generous givers, and will have a disproportionate impact on the arts, museums and cultural charities, which are often dependent on a small pool of larger-value donors.

The Chancellor is concerned that individuals can use the available reliefs to avoid having to pay tax. However as charities have pointed out many donors give away far more than they can claim in tax relief, and this money is used directly by charities for public good. The government should of course clamp down on any individuals that might be using ‘bogus charities’ to avoid paying tax, but through existing channels, rather than imposing a blanket cap which will cost genuine, hard-working charities millions of pounds.

The decision to cap relief on donations perversely comes on the back of a government drive to encourage philanthropy, and several helpful measures included in last year’s budget, including the Cultural Gifts Scheme – which will give tax reductions to those donating pre-eminent art and objects to museums – and the Legacy 10 campaign. It puts at risk several government schemes set up to boost charitable gifts, including Catalyst, a DCMS-supported initiative to match-fund donations to arts organisations.

Stephen Deuchar, Director of the Art Fund, said, 'The Chancellor's decision to cap the relief on charitable donations makes little sense. Museums and art charities like the Art Fund are heavily dependent on support from private donors and capping tax relief on gifts could have a devastating impact on planned fundraising and capital appeals, not to mention the government’s own new Catalyst Endowment scheme. The cap will discourage the most generous donors at a time when charities are being asked to rely more heavily on their support.’

The Art Fund has joined over 1,000 other charities in signing up to the Give it Back, George campaign.