Charity Tax U-Turn Confirmed By Treasury - The Fifth U-Turn In A Week

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CHARITY TAX
David Cameron's Big Society Was Seen At Odds With The Charity Tax | PA

The government has performed yet another U-turn, abandoning plans for the so-called "Charity Tax" - a cap on tax-relief for philanthropic donations which was due to be set at £50,000.

The government confirmed it is exempting charitable donations from tax, something Labour has been calling for for some time. Chancellor George Osborne said: "It is clear from our conversations with charities that any kind cap could damage donations, so we've listened."

This is the government's fifth U-turn this week - it has already ditched or watered down plans for VAT on cornish pasties and static caravans, secret trials involving sensitive evidence and a study into the humane killing of buzzards.

The government made the U-turn on Thursday lunchtime, while Jeremy Hunt was undergoing a thorough grilling at the Leveson inquiry and the spotlight was also on former Number 10 spin doctor Andy Coulson, who has been charged with perjury.

It was not immediately clear which embarrassing event it was that ministers were trying to bury, or if the government had just decided to get all the bad news out on the same day.

The Conservative backbenches will have mixed views about the latest U-turn. On Wednesday the co-secretary of the backbench 1922 committee told The Huffington Post that continued incoherence from the government risked damaging its credibility.

However despite Nick de Bois' warning, most Tories privately will be happy to see the back of the Charity Tax, which was widely seen as a pointless and damaging policy.

And Andrew Tyrie, the chair of the Commons Treasury committee, has said that excessive Budget leaks led to the series of U-turns.

However in conjuction with the other u-turns on pasties and caravans earlier this week, George Osborne now has a fairly sizeable hole in his Budget, which has still to complete its passage through the Commons later in June.

Charities welcomed the policy reversal, with Sir Stuart Etherington, Chief Executive of the National Council for
Voluntary Organisations, saying: "We are delighted that the Chancellor has listened to reason and pledged to drop the charity tax," he said.

"This is a victory for common sense and validates the strength of feeling from the thousands of organisations who lent their weight to the Give it Back, George campaign. This is a great day for philanthropy."

Treasury sources told the BBC that this would be the last U-turn for a while, although as HuffPost reported a few days ago, there are plenty of other unpopular policies considered ripe for the chop.

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