PM ‘ready to listen’ to critics of charitable giving tax relief cap

PRIME Minister David Cameron has given a strong hint that he is ready to water down a controversial cap on tax relief for charitable giving, saying he was ready to listen to critics and take time to “get it right”.

The PM said he wanted to see more philanthropic giving to charities – something a Treasury minister conceded would fall under the plans announced by Chancellor George Osborne in the Budget.

Downing Street confirmed a full consultation would be held over the summer on Mr Osborne’s policy, which would see a limit on a range of income tax reliefs of £50,000 or 25 per cent of income, whichever is the greater.

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The Treasury has said the move, announced in the March Budget and due to be introduced next year, will crack down on wealthy individuals who use reliefs to minimise tax payments. It released figures showing that 6 per cent of those earning £10 million-plus paid less than 10 per cent in tax and another 3 per cent came in below the basic 20 per cent rate.

Fewer than three-quarters paid more than 40 per cent.

But charities denounced the Chancellor’s policy and warned it would hit good causes, such as medical research, education and help for the vulnerable, while raising “relatively small amounts” in additional tax.

Mr Cameron said: “This was never going to be introduced until next year – plenty of time to get it right, plenty of time to consult and to listen.”