UK-based charities have responded to controversial changes to tax allowances by permitting would-be philanthropists to donate without being used as a tax efficiency vehicle.
Changes announced in the recent Budget speech sought to limit the amount of tax relief any individual can claim in total, including tax breaks on charitable giving. Charities, fearing a loss of income as a result, have been forced into a response. A spokeperson for the Charities Commission told us that "we will be instructing our members to start accepting donations from people not seeking to minimise their personal tax burden, but actually believe in the cause and wish to support it".
Previously, charities only sought to attract donors by outlining the potential returns to investors and will now have to change tack completely by "spelling out a cause for which people may be interested in, not because of financial gain, but because they actually care. It's a complete paradigm shift which we'll be helping our members come to terms with" said our spokesperson. "They'll have to shift focus away from creating complex financial instruments and tax vehicles and start thinking about raising money for good causes".
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