Philanthropists in the UK could be rewarded for their generosity in the foreseeable future. A report commissioned by the country's ministers has suggested income tax cuts for the country’s most charitable donors.
The study, which highlights ways to boost philanthropy for the arts and heritage, recommended that the most generous patrons have their income tax reduced if they make a “minimum period financial commitment to a charity,” the Telegraph reported. The UK's most prolific philanthropists could reportedly save millions of pounds in taxes under the proposal.
According to a study by the Charities Aid Foundation and the National Council for Voluntary Organizations, individuals in the UK gave 11 billion pounds to charity between 2010 and 2011.
Currently, British citizens taxed at a high-income rate who donate to a charity can reclaim more than half of the tax. But in a budget the UK Chancellor announced for April 2013, this deduction would be capped at 50,000 pounds per year, the Telegraph said.
Charities and philanthropists have spoken against the proposed deduction cap, saying it would discourage a number of donors. The Art Fund claimed that over the next three years, up to 175 million pounds of private donations to government-funded arts organizations would be at risk if the proposal is enacted.