The UK coalition has in its recent budget and other proposals for change cost many people money. It has of course generously eased the tax burden for some of the most wealthy people in the UK.
David Cameron has indicated today that it may do an about turn on one tax reform. This tax is one that would affect the revenue raised by charitable donations each year. It does appear that UK fat cats have been tax dodging by exploiting the charitable donations tax relief.
Currently the state of play is," higher-rate taxpayers donating to a charity can reclaim more than half of the tax. From April 2012, the maximum will be £50,000 per year, or 25 per cent of the individual’s income".
The problem has risen by tax payers donating large amounts to reduce their overall tax bill. It is not a simple issue. There is of course that usually it is a case of "you earns your money, you makes your choice"
Visiting Asia currently David Cameron said there is"no doubt that abuse is happening". According to the Telegraph he went on, “We’re very clearly informed of that, by the Inland Revenue, some people have been using charities established in other countries to funnel money in and get their tax rates so they’re not paying 50p tax or even 45p tax but in some cases are paying 10 or 20 per cent tax, and I think that isn’t right."
This would mean that they were paying less tax than ordinary UK workers.
Charities have seen funds plummet due to UK austerity and cuts to government funding. If Mr Cameron tightens tax loopholes charities will suffer. For now he has said that the government will look sympathetically at the problem and perhaps water down the changes.
Tags: UK tax relief, UK charitable donations, UK fat cats, UK PM, David Cameron, UK tax changes, give it back