§ Mr. Tim Smithasked the Chancellor of the Exchequer what is the total cost of tax relief for giving to charities.
§ Mr. MooreIn the year to 30 September 1984 the Inland Revenue repaid to charities tax of some £250 million, of which repayments in respect of deeds of covenant amounted to some £110 million. Following the introduction by the Government of legislation in 1980, reducing the qualifying period of such deeds from 7 years to 4 years, and the introduction of higher rate tax relief for charitable payments, tax repayments have increased by 93 per cent. Repayments in respct of deeds of covenant have increased by 15¾ per cent. over the last year.
No exact information is available about the cost of exempting charities from tax on income which they receive without deduction of tax; nor about the cost of other exemptions or reliefs to which they are entitled. However it is unlikely that the cost of all direct tax concessions is less than £400 million a year.
To give further help to charities, the Chancellor announced in his Budget that he proposed to increase, from £5,000 to £10,000, the limit to which relief at the higher rates of tax is allowed for covenants.