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Governments u-turn on charities tax relief welcomed

The government’s decision to scrap plans to limit tax deductions on charitable donations has been welcomed by leading figures in the art world. The original plan was to limit tax relief to 25% of income or £50,000.

Sir Nicholas Hytner, National Theatre director said the theater was pleased the mistake was corrected so quickly. Another key figure in the arts industry, Stephen Deuchar of The Art Fund charity was happy “the government had listened.” Deuchar added that the initial plan to limit tax relief would have seen a negative impact on many charities and would have curtailed some of their activities.

Sir Nicholas pointed out that limiting donations would have put in jeopardy projects such as construction and appeals for endowments. The quality of artworks in the public domain would have been at risk and it was a relief that wealthy philanthropists would again feel free to discuss with the National donations which had been in doubt given the previous uncertainty.

Charles Sumarez Smith, of the Royal Academy of Arts said the government should be congratulated for reconsidering its earlier position. Smith, giving his comments on the BBC News website labeled the original plan idiotic and was giving the opposite signal to its original intention: to recognize and encourage private gifting.

The arts industry consumes a very small amount of government expenditure, but lobbyists are very effective and include knights, dames and other public figures that the government relies on for support of other programs.

Chancellor George Osborne said the issues raised by charity interests had been taken into account. The Chancellor stressed it was clear that a cap on donations had the potential to limit private gifting to charities which was not the government’s intention.

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