Charities will suffer from new curbs on donations

A Budget cap on tax breaks for charitable giving will hit the most vulnerable, George Osborne was warned today.

Cancer research and care for the elderly and dying will suffer a drop in funds while universities will also be starved of cash, leading philanthropists said.

Charities demanded urgent talks with the Treasury after the Chancellor 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.

It is part of moves to clamp down on tax avoidance but sparked a furious backlash. Thomas Hughes-Hallett, chairman of the independent Philanthropy Review to encourage giving and chief executive of Marie Curie Cancer Care, said it had “stirred up a hornets’ nest” and would undermine government efforts to encourage donations.

He also said it would remove crucial millions from charities at the same time as government cash was drying up, putting its “Big Society” vision at risk. He said: “It’s bad news for cancer, bad news for care at the end of life, bad news for support for the aged. It is the vulnerable in society who I’m afraid are going to suffer from an ill-thought-through attempt to clamp down on tax avoidance.”

National Council for Voluntary Organisations chief executive Sir Stuart Etherington said the move “really sets alarm bells ringing” and warned it could have “very serious consequences”.