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Govt u-turn on charities tax cap

Controversial plans in the Budget to limit the amount of tax relief on charitable donations have been dropped after protests from charities, philanthropists and Tory MPs. It follows Treasury u-turns this week on the "pasty tax" and "caravan tax."

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Osborne responds to charity protests

The charities tax announcement is the latest U-turn from the 2012 Budget Credit: REUTERS/Suzanne Plunkett

The charities tax cap - limiting relief at £50,000 or 25% of income - was proposed in George Osborne's March Budget but sparked massive protest from charities, who warned they could lose a significant proportion of their income.

Announcing the latest in a string of U-turns on Budget proposals, following climbdowns on the "pasty tax" and "caravan tax" earlier this week, Mr Osborne said that he would be pressing ahead with the cap on income tax reliefs for wealthy people which do not relate to charitable donations.

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