Arts may reap millions in tax-free donations

DONATIONS TO theatres, museums and galleries should be made tax free to encourage more private giving to the arts, Gerry Robinson, the chairman of the Arts Council, says today.

He is likely to gain the support of Chris Smith, the Culture Secretary, who believes the proposal could generate millions of pounds for Britain's cultural life.

The Government is considering including the measure in its next Budget. According to senior Treasury sources, Gordon Brown, the Chancellor, is "sympathetic" to the proposal, although he has not yet assessed the financial implications.

In an interview with The Independent on Sunday, Mr Robinson said the Arts Council, the Government's main cultural quango, planned to mount a high-profile campaign for artistic donations to be exempted from tax.

He would like to see a system similar to the arrangement in the United States, where tax credits are given to the donor rather than the recipient of the gift. "There is a very, very good case to be made for adopting the US style of tax allowances," he said. "We would see a much greater contribution from individuals to the arts ... We need more money."

Research for the Arts Council has estimated that changing the system would generate more than pounds 20m a year in extra money for cultural activities. But the American model suggests that the additional money would be cumulative because allowing donors to keep the tax acts as a big incentive to give. Donors can retrieve tax on some gifts here, but the extra money goes to the recipient rather than the donor.

Sources at the Department of Culture say Mr Smith is "very sympathetic" to the idea. He is likely to lobby for it to be included in the next Budget to prove the Government's on-going commitment to the arts.

In the past, opposition has always come from the Treasury, which fears the cost of the tax exemption would soar.

The Chancellor was said to not against the idea in principle. "He has not yet studied the detail but he is certainly very keen to support the arts," an ally said.

The plan will win the support of politicians from both sides of the House. Peter Ainsworth, shadow culture spokesman, has been studying a similar proposal and will raise it at a seminar on arts funding, hosted by the Tories, next month.

"There are already tax breaks for giving money to the arts but they are complicated and I would like to see them simplified to encourage more donations," he said.

Interview: Culture, page 1