Posted by: the3rdi | April 3, 2012

Open letter to Michael Moore, Secretary of State for Scotland

UK Government charity tax grab will harm Scottish charities

We, the signatories to this letter, are calling on the UK Government to reverse its decision to introduce a cap on the amount of tax relief that donors can claim on charitable donations.

This change will effectively increase the cost of donating to charities for large donors, almost certainly reducing the income of charitable organisations. Although it will only affect a relatively small number of donors, it will affect the largest and most significant donations. With around 50% of the £11bn donated to charities in the UK each year coming from just 8% of donors, the new rules will have a disproportionate effect.

As many organisations have been making clear in response to the change, today’s donations are tomorrow’s grants, and they translate into invaluable charitable activity in every community in the country. Voluntary grants and donations made up 10.7% of Scotland’s third sector income equivalent to £470m in 2010.

The new rule is additionally puzzling given that it is incompatible with the UK Government’s stated intention of building a “Big Society” and encouraging philanthropy. This becomes particularly important at a time when public funding of charities is reducing while demand for our sector is increasing. The cap will have the opposite effect.

The cap is also being introduced as part of a range of other tax relief caps aimed at tackling tax avoidance – effectively equating charitable giving with avoiding taxes is an astonishingly unhelpful message. Rather, this measure is a partial withdrawal of the Government’s tax support for charitable giving.

We want the UK Government to reverse its decision and exempt charitable donations from the caps on tax relief before it can do any damage to the essential work of charities across Scotland.

Yours sincerely

Martin Sime

Chief Executive

SCVO

 

Sir Timothy O’Shea

Principal and Vice Chancellor

University of Edinburgh

 

Professor Ian Diamond

Principal and Vice Chancellor

University of Aberdeen

 

Professor Steve Chapman

Principal

Heriot-Watt University

 

Dr Gordon Rintoul

Director

National Museums Scotland

 

 

Professor Anton Muscatelli

Principal and Vice Chancellor

University of Glasgow

 

Professor Pamela Gillies

Principal and Vice Chancellor

Glasgow Caledonian University

 

John Leighton

Director-General

National Galleries of Scotland

 

Gregor McNie

Scotland Manager

Institute of Fundraising

 

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