Charities have warned a cap on tax breaks will hit donations by millions of pounds a year.
Chancellor George Osborne announced that anyone attempting to claim more than £50,000 in relief – the equivalent of making a £200,000 lump sum donation – would be hit by a new cap at 25 per cent of income.
The changes are being introduced to clamp down on tax avoidance by the richest by ensuring they “cannot use income tax reliefs excessively”.
But the Government acknowledges it could also hit charity coffers. It pledges to “explore” ways to ensure the measure does not deter philanthropists from giving.
Charities have called for “urgent talks” with the Treasury, fearing the move will “strangle” major donations by the wealthy.
The Charities Aid Foundation (CAF) claims organisations are set to lose out on millions.
Chief executive John Low said: “Government can’t have a philanthropy agenda on the one hand and then introduce measures like this on the other. This change seems to run counter to the very idea of Big Society.
“These changes represent a huge cut in tax relief on major donations to charity by wealthy philanthropists whose generosity is supporting some of the most vulnerable people in society.
“Tax relief on major donations is not tax avoidance. It is supporting major donations by people who in some cases are donating the proceeds of a lifetime’s work to charity.
“Such a change risks reducing major donations by Britain’s richest individuals at a time when charity budgets are being squeezed.
“We need urgent talks with the Treasury to ensure that this does not affect charity finances.
“Now more than ever we should be making it easy for people to donate to charity.”
