# Institute of Fundraising suggests solution to tax relief cap

- Link: https://fundraising.co.uk/2012/05/01/institute-fundraising-suggests-solution-tax-relief-cap/
- Published: 2012-05-01T14:41:22+01:00
- Author: Howard Lake

The Institute of Fundraising has again asked the Chancellor to cancel his proposed
tax relief cap because of its impact on charities’ income from major gifts. In doing
so it has proposed an alternative solution, a proposal which has recently been suggested
by the British Red Cross.

The charity suggested that donors should be able to choose between claiming the 
tax back themselves, in which case it counts towards the tax relief cap, or donating
it to the charity, in which case it would not.

Peter Lewis, IoF Chief Executive, said that the government “should treat higher 
rate taxpayers in exactly the same way as standard rate tax payers and allow the
charity to reclaim all of the tax paid against their donations”. He added that a
survey of its 5,200 members on the issue found that 77% of the 669 who responded
supported this solution.

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## Benefits of the British Red Cross proposed solution

The Institute said that allowing a charity to reclaim all of the tax paid against
donations would have the following benefits:

• The reclaim by the charity would come after tax had been paid – so all tax payers
would be being taxed in the same way

• It would be equitable between higher and lower rate tax payers – at the moment
only higher rate tax payers can benefit from income tax relief on their

donations; lower rate tax payers can not

• It would remove any opportunity for tax avoidance as the tax reclaim would be 
by the UK registered charity.

## Institute still committed to GiveitbackGeorge campaign

Whilte supporting the proposal, Peter Lewis confirmed that it was still committed
to the [GiveitbackGeorge campaign](http://www.giveitbackgeorge.org). He said: “Our
members have told us clearly that this has already had, and will continue to have,
a negative impact on philanthropists’ willingness to give to vital charitable causes,
and that they will be able to deliver fewer programmes as a result.”

He added: “Supporters give because they care, not because they wish to avoid tax.
The suggestion that giving to charity is a method of tax avoidance is hugely

regrettable. The Government must rethink its proposal.”

The Institute is now seeking to meet with the Government to discuss how its proposal
might be implemented.

www.institute-of-fundraising.org.uk