Wealthy avoid paying tax by making donations to charity

The government have recently released a statement which is shown that some wealthy people are donating money to charity in order to avoid tax. Charitable donations are subject to tax relief but it is important that the money given to the charity is put towards charitable work. The Chancellor has recently announced that too many people are taking advantage of the system designed to benefit charities and are using it to avoid income tax.

In order to tackle the problem the Chancellor has said that there will be a cap on the amount of tax that can be deducted from charitable giving. However, this does have the disadvantage that genuine charities are going to get less money given to them as tax will have to be paid. Various charities have spoken out against the planned introduction but the government have held their ground.

A spokesperson for the Prime Minister has stated, “This cap has not been introduced to punish charities, it has been introduced to reduce the amount of income tax that can be avoided by people by giving money to charities that don’t do very much charitable work. It is a system used by people to reduce their liability to tax and we don’t think that this is fair.”

The Chancellor has recently commented in an interview with the daily Telegraph that he, “was shocked to discover how people were avoiding tax so effectively using this system.” He commented about how he had seen the tax returns from some of the wealthiest people in the country and how they were using the system to dramatically reduce the amount of tax they were paying.

The reports showed the Chancellor that some of the wealthiest people were only paying an average of about 10 percent tax because of clever, and legal, methods of avoiding it.