In the March 2012 Budget, Chancellor George Osborne announced that tax reliefs, including one on charitable donations, would be restricted. After much opposition, it was announced today that plans to limit tax relief on charitable giving have now been dropped. All other planned restrictions will remain.
The current rules are that higher rate taxpayers can donate unlimited amounts of money to charity and offset them against their tax bill to effectively bring down the amount of tax they pay; sometimes this results in a zero tax bill.
Announcing the change today, Mr Osborne explained: “I can confirm that we will proceed next year with a cap on income tax reliefs for wealthy people, but we won’t be capping relief for giving money to charity.”
If you have a query about tax rates or would like more information about this tax efficient way to give to charity, please contact our team today.