Philanthropy plan took Jeremy Hunt by surprise, says National Theatre boss

Sir Nicholas Hytner says plan to cap tax relief at 25% of income goes against culture secretary's plan to encourage philanthropy

The culture secretary, Jeremy Hunt, was blindsided by Treasury plans to restrict tax relief for philanthropists, the National Theatre's artistic director, Sir Nicholas Hytner, has claimed.

Hytner is one of a number of figures from the arts and charities campaigning for the government to think through the impact of its changes to tax relief in the budget.

The chancellor, George Osborne, announced that anyone seeking to claim more than £50,000 of tax relief in one year would be subject to a cap at 25% of their income.

The budget document recognised the knock-on impact of the plans, and promised to "explore with philanthropists ways to ensure that this measure will not impact significantly on charities that depend on large donations".

Hytner, speaking on the BBC, said the budget decision was already having an impact, describing it as a blow. He said £40m of already committed gifts to the National Theatre were now under threat.

He said: "A lot of that money has been pledged in instalments over the next four years in good faith by generous wealthy individuals who will now obviously be having to look at whether they can meet their obligation because they planned their donation under current regulations.

"There are a significant amount of people who plan their giving according to what they are left with at the end and if they are going to be left with less they will have to adjust their giving accordingly."

He said the changes, part of a wider coalition package designed to impose a cap on relief for high income earners, "came completely out of the blue and I have to say I think it came completely out of the blue for the department of culture as well. I just don't believe they were included in these discussions."

He added: "Hunt has been very eloquent on the benefits of philanthropy and how necessary it is for us – those who have hitherto been dependent on government subsidy – to go out and raise money. That is what we have been trying to do."

He pointed out that Hunt himself frequently cited the United States, where those who earn more than £150,000 a year give eight times more of their income to charity than those in the UK.

Hunt "has set out to change this and it appears that the Treasury has completely pulled the carpet from under him", Hytner said.

He added: "We have got ourselves into a position now where it is probably easier to raise $8m from Americans for the British National Theatre than it is going to be to raise money from our British supporters.

"I would hope those within the government who were blindsided by this will be able to persuade the Treasury that they are doing something that makes no sense according to their own policies."

Aid organisations have also said they fear they will be badly hit by the reforms. Unicef has already been warned by one donor who was lining up a six-figure gift that it may now be pulled because of the budget changes.

The Treasury argued that in its 2011 budget it provided a tax break for people who donate 10% of their legacy to the arts. From this month such philanthropists are eligible for a 10% reduction in inheritance tax bills – a move that could result in more than £350m worth of additional legacies in the first four years of the scheme. But a survey by the Charities Aid Foundation after the 2012 budget claimed eight out of 10 major philanthropists had warned the plans to cap tax relief on major donations would reduce the amount of money given to charity.


Patrick Wintour

The GuardianTramp

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