A Suffolk charity has raised concerns that funding could be hit if the government goes ahead with a tax relief cap for giving to good causes.

In last month’s budget announced last month, the government announced measures to rein in reliefs claimed by the rich, which it hopes would bring in �300 million in extra revenue each year.

But St Nicholas Hospice in Bury St Edmunds fears the moves – which would limit income tax reliefs to �50,000 or 25 per cent of income – could put philanthropists off giving.

Fundraising and marketing director, Kevin Clements, said: “My biggest concerns surround how this might impact our already challenging fundraising task.

“This move may discourage large donations, many of which keep trusts and grant-making foundations alive. These organisations alone currently contribute a vital quarter of a million pounds to St Nicholas Hospice Care each year. I also believe individual major donations could become rarer as a result of the proposed changes.

“We need to make it easier for people to help us, not harder.”

Because the economic downturn has hit members of the public, the hospice has been trying to attract larger donations in addition to applying for funding from foundations or grant-making bodies.

“We are lucky with the support we get from the community, because it is tough out there at the moment. But we have been trying to develop income from larger donors and these moves could hit us hard,” added Mr Clements.