George Osborne: We got it wrong on charity tax

George Osborne When you are in a hole it is better to stop digging, Mr Osborne said

Related Stories

Chancellor George Osborne has told the BBC that the government "got it wrong" on its proposed changes to taxation on charitable giving in the Budget.

He defended the U-turn on the proposal, telling BBC Radio 4's Today that "sometimes the only thing worse than listening is not listening".

Mr Osborne said the leaking of some of his plans prior to the Budget statement in the Commons had been unhelpful.

It had been difficult to balance deficit cuts with tax reforms, he said.

"Potential losers notice more than potential winners," Mr Osborne noted.

At the moment there is no limit to tax relief on charitable donations, so it is possible to donate enough money to charity to bring a tax bill down to zero.

The government had wanted to introduce a cap from 2013 of £50,000, or 25% of a person's income if that was higher.

Charities warned that the plan would reduce their income.

'Battles worth fighting'

The government also came under fire for other measures in the Budget which became known as the pasty tax and the caravan tax. It subsequently altered these plans as well.

Mr Osborne said that collectively these proposals amounted to "less than 5%" of the Budget".

The "bulk" of the Budget had survived, he added, hailing the decision to raise the threshold at which the bottom rate of income tax is payable.

"Tax reform, when you don't have a lot of cash around, is difficult," Mr Osborne said.

But he claimed he had learned from the mistakes of his predecessors, who had found their Budgets to be unpopular: "Most of the errors occur when politicians keep digging."

On the charity tax, the chancellor conceded: "We got it wrong. So I thought it much better to say that we just won't do it."

He pledged to "fight the battles that are worth fighting".

More on This Story

Related Stories

More Politics stories



  • How ebola spread graphicPatient zero

    How one boy’s death triggered Ebola outbreak

  • Passport control at airportNews quiz

    How much do you know about migration?

  • Phillip Hughes playing cricket for Australia in September 2014Brain trauma

    How is the brain injured and protected from injury?

  • Passengers pushing planeHeave!

    How many people does it take to push a plane?

  • Complainant'Like being in hell'

    The story of one victim of paedophile care home boss

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.