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Page last updated at 07:49 GMT, Monday, 16 April 2012 08:49 UK

Wealthy 'can opt out of income tax'


After days of negative headlines, the Treasury has released figures to defend its plans to limit the tax relief on charitable donations.

They suggest that almost a tenth of people earning more than £10m a year pay an average rate of income tax of 20% or less.

"We don't think it's entirely fair that the tax system as currently designed does mean that there are some very wealthy individuals who are essentially able to take themselves out of the income tax system," Exchequer Secretary to the Treasury David Gauke MP told the Today programme.

The government believes the tax system should encourage philanthropy, he said, but the balance had to be right so that wealthy people still funded the NHS and armed services.

"We're not legislating for this today, this is something that will come in in next year's Finance Bill," he said.

"We made it very clear from the very beginning that between now and then, we were going to be working with charities to find ways to protect charities that are particularly affected by large donations."

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