Cap on charity tax relief causes problems

The row over chancellor George Osborne's plans to impose a cap of tax relief for charitable donations has escalated once again.

Mr Osborne is looking to implement a cap of 25 per cent of income or £50,000 on tax relief available on donation.

The aim is to push the wealthiest within society into paying their fair share of tax. With the chancellor scrapping the 50 per cent income tax band, this pressure is only going to grow.

However, there are reports suggesting that the chancellor is considering doubling the limit on charitable donations to 50 per cent of earnings. He is also thought to be considering allowing donors to roll over any relief they don't use into the following tax year.

Charities are fearful of losing out on donations if the plans aren't adopted at least to some extent. But the public is also keen to see that the wealthy are paying their fair share of taxes to contribute to the funding of services such as the NHS and education.

Further controversy is expected to arise when the bosses of the country's biggest charities meet government ministers at the Natural History Museum to discuss the charitable sector.