Belfast Telegraph

Saturday 25 October 2014

Cable enters charity tax relief row

Vince Cable has said he is 'sympathetic' to concerns raised by universities over the cap on tax relief for charitable donations

Business Secretary Vince Cable has weighed into the increasingly bitter row over Chancellor George Osborne's controversial cap on tax relief for charitable donations.

The senior Liberal Democrat Cabinet minister let it be known that he was "sympathetic" to concerns raised by universities that funding for scholarships and research could be hit by the move.

Meanwhile Arts Council England warned at least £80 million in regular donations to its organisations was at risk, while a new £55 million "matched funding" scheme with the Department for Culture, Media and Sport could also be in jeopardy.

Mr Cable's intervention came after the umbrella body Universities UK wrote to Mr Osborne warning that they were likely to be "particularly hard-hit" by the cap as they relied heavily on big donations.

"Concerns have been raised with ministers including Vince by universities and he's sympathetic to those concerns," a spokeswoman for Mr Cable said. "We will make sure that what we are hearing from universities is fed back to the Treasury."

Universities UK chief executive Nicola Dandridge said the cap could undo much of the progress universities had made in raising funding from private donors.

"Universities raise considerable sums from philanthropic gifts, £560 million cash in the last year," she said. "These donations make a major contribution to the support universities can offer students through bursaries, scholarships and improved facilities such as libraries. It also contributes to advancing research.

"Because universities are the preferred cause of major donors - gifts over £1 million - we anticipate that they would be particularly hard-hit by the change in the Budget."

Treasury Minister David Gauke insisted the Government stood by the "broad principle" of the cap in order to stamp out "abuse" of the system by wealthy individuals who used tax reliefs to minimise their income tax payments. But after David Cameron said during his tour of the Far East that he was "very sympathetic" to the concerns raised by charities, Mr Gauke said the Treasury was looking at how it would be implemented.

"The broad principle that people should not be in a position where wealthy individuals don't pay income tax or very low rates of income tax is something that we are right to address," he told The World at One. "But of course, when it comes to the implementation, as we have said all along, we want to work with charities."

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