How far will they go?

The HMRC (Her Majesties Revenue and Customs) has a large amount of legislation regarding the taxation of different aspects of income that charities raise through their endeavours and the benefits that this can sometimes afford to the donor. There are some potential tax benefits for "Substantial Donors" but now it would seem that the HMRC is looking to further extend this legislation to include a "Motivation Test". In short, this would mean that various donations and charitable enterprises would be prevented if the HMRC believes that there is an intent to dodge tax through helping a charity. This is deeply frustrating for many fundraisers as although this legislation is aimed only at the largest of donations / activities (£25,000+) it could well serve as a deterrent to other donors. There can be little doubt that there have been the odd instance of individuals choosing to pay less tax by giving large sums to charity, but unless there is some sort of complicity or inherent criminality should this be stopped? Is it not in the best interest of charities to assume honest intentions behind donations? The government made a large song and dance about increasing the highest band of taxation to 50p for those earning over £150k a year. Alas it would appear that some bright spark in the HMRC that those targeted could just well make a substantial donation to charity instead of contributing to the bath plug in some back-benchers second home! It would appear that this government is really struggling to balance its moral book at the moment. Firstly, moving to bail out failed businesses instead of ensuring that charities got their money back from the Icelandic Banks (another post). Now it would appear they will try to close one of the few remaining "loopholes" that had any sort of social benefit. Let's be realistic for a minute or two, if someone wishes to donate a large sum to charity is it unreasonable to allow them to take this out of their gross income? Is it unconscionable that a private individual (who will have paid a fortune in tax already) chooses to have a direct say in how their money is spent in the community. Although legislation is still pending - the enquiry starts on Friday - I would hope that wisdom prevails and the "common good" is considered over anything else, it would be a crying shame to make it any harder for private individuals to make large donations. Maybe I would have less of a problem with this if the government would sort Gift Aid out properly and grade all donations dependent on how much tax that individual pays as opposed to the lowest rate... but in the end this means less tax revenue and they can't have that can they? What are your thoughts? -- So far the project is moving along - I still have no resolution and it is looking increasingly likely that I shall either have to register as a charity or at least a "Charitable Enterprise" dependent on the final route I decide to pursue. Also I missed two posting deadlines becasue I locked myself out of my computer. Now I have taken the password off - the background is a statement about this project; I wonder if anyone would return it if I left it on the train?