Nick Clegg: Charity tax U-turn means ordinary taxpayers will subsidise rich people’s donations
As always with u-turns, one of the lasting consequences is that ministers and MPs have repeatedly defended something on the record which they then abandon. People are made to look like wallies.
The charity tax was a problem for David Cameron, because it appeared to undermine his Big Society vision of us all being enthusiatic philanthropists.
But for Nick Clegg it was a key part of his so-called “Tycoon Tax”, to stop the very wealthy using a whole range of schemes and allowances to drive down their tax bill.
When I interviewed the Deputy PM last month, he said the coalition would look at the particular grumbles of charities, but insisted that ordinary taxpayers mustn’t subsidise the charitable giving of the very wealthy. His point, one assumes, still stands.
This is what he said:
“I really think it’s quite important to remember that 25 per cent of a very wealthy persons’ income for a year going tax free to charities is a considerable tax break. There just is a balance to strike here which is, yes we want to encourage charitable giving, it’s either £50,000 which by most people’s standards is a lot of money, or 25 per cent of income which ever is higher, if you are earning £4m a year, that’s a million quid. You can give more, there is nothing to stop you giving more.
“People think we have completely stopped any allowance. We haven’t, it is still relatively generous.
We will look at those really tough cases, there is an underlying issue here that if you don’t do something about these allowances which allowed very wealthy rich people to avoid paying income tax altogether, you are effectively asking ordinary taxpayers to subsidise them.
“In austere times with not a lot of money around the principle of making sure everyone pays their fair share, what I call a tycoon tax, has got to be right.
“The principle is clear and we will stick to that.”
Er… except they won’t. Oh dear.Tagged in: charities, clegg, coalition, david cameron, Nick, tax, UK politics
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