Perhaps They Can Both Lose

Charities are up in arms about the chancellor’s recent comments regarding wealthy donors using donations as a means of avoiding tax.

Let me get one thing clear, here, tax avoidance is a sacred duty. Everyone should do all that they can to legally deprive the beast of funds and if the wealthy deny it large sums, then that is a good thing –  less money for politicians and bureaucrats to piss up the wall on illiberal schemes and to splash about the third world buying kleptocrats their latest Mercedes Benz.

One of the financial wrinkles people use is to give money to charity and for the charity to claim the tax on that money. This is a deed of covenant and I have used it in the past. It means that the charity gets a little extra and the chancellor a little less. This a good thing. However, the loony left sees this as a dodge and in appeasing them, our so called Tory chancellor has now upset the charities.

A spokesman for David Cameron yesterday said that multimillionaires are donating to charities which do little work for good causes to “wipe out” their income tax bills.

George Osborne, the Chancellor, plans to limit tax breaks for donations to good causes after being “shocked” by the scale of tax avoidance.

Yet the state willingly funds so-called charities that do no work whatsoever for good causes. All those fake charities such as ASH and CASH and Alcohol Concern –  busy bodying lobby groups that feed like greedy parasites off the public purse. So a charity is not necessarily defined by the good works it does, merely by its being recorded as such by the charities commission, then?

Frankly, if I was wealthy enough to fall in this bracket, I would see every penny donated to my charity of choice as one less penny available for the fake charities so beloved of the state. This would be a good thing.

But charities told The Daily Telegraph that the Government’s aggressive rhetoric would be interpreted as an attack on all giving at a time when many organisations are already struggling to cope with cutbacks in state funding.

There should be no government funding. None, zero, zilch, nada, nil. Charities should rely entirely on donations from supporters. They should not have a hand in the taxpayer’s pocket and if this latest little bit of faux outrage takes us a step in that direction, maybe some good will come of it –  although I am not overly hopeful. If a charity cannot support itself from donations alone, then it does not deserve to survive as insufficient people are interested in what it does. I’d like to see those fake charities survive on donations from well wishers…

Unicef, the children’s charity, said that the government’s approach was already hampering urgent efforts to raise funds for a million children facing food shortages in West Africa.

And this, frankly, is a prime example of what is wrong. Our taxes should not be going to fund Africa. If individuals feel moved to give, then fine, let them put ever more money into a bottomless pit, but the exchequer should not be raiding the tax take to do it. Africa is Africa’s problem to sort out. We have been pouring millions in aid to this continent for decades and it has done little if anything to resolve the core problems. What it has done is create a culture of dependency and there is only one cure for that –  cut off the drug and let them sink or swim by their own efforts.

Apparently Cameron’s Big Society that relies on charities to be effective might also be placed at risk, the charities bleat. So, it looks like a win-win all round, then…


  1. Where is the joined-up (government) thinking? We have state sponsored pressure groups effectively arguing that the chancellor is wrong.

    Perhaps the issue, like the welfare and tax, is way too big to manage?

  2. Perhaps it is time that the whole issue of what constitutes a charity is looked at and clarified.

    I am a member of the Motorcycle Action Group (MAG) and it avoids paying some tax by virtue of being regarded as a “charity”. It is no such thing, it is a pressure/lobbying group working on behalf of motorcyclists. No way would I regard it as a charity.

    I can’t blame them for using the tax rules to maximise their income, but question whether they should be eligible to be a “charity” in the first place.

    • Hi Maaarrghk!,

      As I noted over at Chris Snowdon’s blog, the government shouldn’t be deciding what counts as charity (as in so many areas, they’ve shown they can’t be trusted).

      From a legal and tax perspective, there should be no distinction between charities and corporations.

  3. Why should there not be a distinction?

    I have already paid tax on the money I earn. When I donate to a charity I expect for my money not to be taxed again as I am giving it to a charity not a corporation.

    That is to say that I do not expect the charity to pay tax on that part that they use to give alms to one legged lesbian goats in Somalia or whatever the cause – I still expect the charities employees to pay tax on their wages.

  4. MAG is not a registered charity. It does, however, have a charitable arm, the MAG Foundation, which carries out non-political work to support motorcycling generally.

  5. Thanks for that clarification MagMan. I was aware of that but did not want to go into too much detail.

    The way I remember it was that the foundation was set up/registered as a charity at some point in the 90’s to take advantage of the tax laws.

    The point I was making was that this sort of thing should not be regarded by the inland revenue/government as a charity. Not that I blame MAG for taking advantage of the tax laws as they stand – they have a limited income and need to maximise the amount that is available to defend riders rights.

    Perhaps you could provide some more clarification of what exactly the MAG Foundation does that is regarded as charitable.

  6. All those fake charities such as ASH and CASH and Alcohol Concern – busy bodying lobby groups that feed like greedy parasites off the public purse. So a charity is not necessarily defined by the good works it does, merely by its being recorded as such by the charities commission, then?

    And there’s the dilemma. Agree – we should not be funding out of the public purse.

  7. MAG does not maximise the amount available to defend riders rights using charity status, as this part of its income is not tax-deductible under the charity rules. Neither does MAG receive any public funding, so it does not come under the subject of this discussion. Details of the MAG Foundation, which simply promotes rider-training etc., can be obtained from the MAG website if required.

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