Introduction Background
11.In his Budget Statement of 21 March 2012, the Chancellor announced a limit on previously uncapped income tax reliefs with effect from 6 April 2013. The limit is to ensure that those on higher incomes cannot use reliefs excessively.  The limit is set at £50,000 or 25 per cent of an individual’s adjusted total income, whichever is the greater.
12.This section is about fairness: the Government is committed to supporting investment and entrepreneurship – but considers that its support should not be without limit.
13.This section is not being introduced to address tax avoidance; it will however reduce the scope for exploiting these reliefs for tax avoidance purposes.
14.Following engagement with the charity sector the Government decided to specifically exclude charitable reliefs from the cap. The Government consulted on the delivery of the cap between 13 July and 5 October 2012.