The recent Budget speech by George Osborne, the Chancellor of the Exchequer, contained little of note for the charity sector.
It has emerged since the Budget that the government has decided not to withdraw or reduce the 80% business rate relief for charities, which will be a relief for many. This has been confirmed to NCVO and the Charity Tax Group. This relief relates to properties occupied by a charity and used for its charitable purposes (it does not apply to properties occupied by a charity trading subsidiary).
It was also announced in the Budget that £45m of banking fines will be directed towards military charities and other good causes over the next 4 years.
The VAT refund scheme for museums and galleries has been extended to benefit many smaller museums and galleries throughout the UK. The Department for Culture, Media and Sport guidance details the requirements needed to apply for the scheme and the Government will introduce a new tax relief from 1 April 2017. It will apply to temporary and touring exhibition costs and is likely to operate in the same way as Theatre and Orchestra Tax Reliefs.
The government confirmed that Orchestra Tax Relief applies from 1 April 2016 and will work in a similar way to Theatre Tax Relief where eligible costs will be enhanced by 80% for tax relief. A tax repayment equal to 25% of the loss (or of the enhancement if lower) can then be claimed.
£20 million in total will be provided in 2016/17 and 2017/18 to extend the First World War Centenary cathedral repairs fund. Additionally a review into sustaining England’s cathedrals/churches will be set up. This review will consider how the sector can become more financially sustainable.
The personal allowance increased to £11,000 in April 2016 and will increase further to £11,500 in April 2017, which will mean that more people will be unable to claim Gift Aid on their charitable donations.
The National Living Wage increased to £7.20 an hour from 1 April 2016 for workers aged 25 and above and is expected to reach £9 an hour by 2020. There will be some relief for employers as the Employment Allowance increases from £2,000 to £3,000 from April 2016.