Budget response from Access Insurance
“It is disappointing to see the Chancellor barely mentioning charities in this budget. While relieved there were no further increases to IPT, we were disappointed that this tax on responsibility wasn’t reduced or completely removed for charities. Despite campaigning alongside CFG and others, the Government seems unconcerned that the third sector is hit with a circa £40m insurance tax bill each year. It was good to see that VED for emergency vehicles like blood bikes will be scrapped; this will ease running costs for charities providing these invaluable services. On road safety it’s clear the campaigning work done by organisations in the third sector has paid off with £420m dedicated to improving road surface conditions."
James Hill, Marketing, Communications & Project Manager
Budget response from Kingston Smith
“The increase in charity small trading limits to a maximum of £80,000 will be welcomed by the sector. The increase will allow charities to grow their trading operations without suffering the administrative burdens complexities faced by larger organisations.”
“The proposed increase in the limits for the Gift Aid Small Donations Scheme to £30 will be a boost to charities who rely on small donations. We hope that this measure encourages more charities within the sector to claim reliefs to which they are entitled.”
Neil Finlayson, Head of Not for Profit
Budget response from Moore Stephens
“We’re pleased to see that the Government have listened to calls from the charity sector with regards to reducing the admin burden they face, despite the changes not featuring in the Chancellor’s speech itself and being buried in the detail of the red book. In particular, smaller charities will welcome the raise of the de-minimis trading limit from £50k to £80k, a threshold that has not been updated for many years. This will allow them to continue trading as a charity without the need to set up a separate trading subsidiary which comes with additional admin and running costs.
Further, charitable shops now only have to contact donors regarding their donations every three years, where the donation raises less than £20 in Gift Aid a year. Again, this will massively reduce the admin burden that charities face.
Finally, another reduction of admin comes with the increase in the threshold to £30 for eligible donations under the Gift Aid Small Donation Scheme. Charities can now accept more smaller donations without the need to obtain the Gift Aid declaration, which has often caused a lot of hassle and proved time-consuming.
These announcements, on top of the deferral of the Making Tax Digital measures for some charities, will be welcomed by many and allow charities to focus on their charitable causes rather than focusing on the cost and admin involved.
The Government also announced extra funding for Air Ambulances and a £10 million donation to the Armed Forces Covenant Fund Trust to support veterans on the centenary of the First World War, in lieu of exempting VAT on the sales of commemorative statues. It’s good to see the Government supporting the sector with welcomed funding."
Charlotte Ayers, Associate Director, NFP Team
Budget response from Buzzacott
“The Autumn Budget brings some good news for the Charity sector. Charities will be able to generate more non-charitable trading income of up to an increased threshold of £80,000. This threshold has remained at £50,000 for many years.
This is great for those charities who for example, sell Christmas cards and sell general merchandise to raise funds without the need of incurring the administrative costs of setting up a separate trading company to carry out this activity, where the activity is still relatively small."
Luke Savvas, Tax Partner, Charity and Not-for-profit
Budget response from Standard Life Wealth
“Today’s Budget speech saw the word “charity” appear three times, and “charities” six times. Despite this low count, there were some announcements of interest in specific areas for charities. Debt management charities will want to look at the detail of the various financial inclusion announcements in relation to support for social and community lending, including a proposed feasibility study to look at a no-interest loan scheme. Charities dealing with food waste may welcome the announcement of government funding of £15m to distribute surplus food. Blood Bikes charities will also benefit from an exemption relating to vehicle excise duty. There was also news of funding for village halls, Miners’ Welfare facilities and Armed Forces organisations, including funding to support the mental health of veterans.
“Gift Aid administration is also to be simplified for charities, with a new higher threshold for small donations. And in this time when hate crime is under the spotlight, funding of £1.7m was noted for Holocaust commemoration and education to mark the upcoming 75th anniversary of the liberation of the Bergen-Belsen concentration camps.
“Finally with inheritance tax receipts forecast to rise from £5.2m in 2017/18 to £6.9m in 2023/24, charities will want to continue to focus on donor engagement and the important inheritance tax exemption available for legacies to charities.”
Julie Hutchison, Charities Specialist
Budget response from haysmacintyre
"It is encouraging to see a number of announcements aimed at reducing the administrative burden on charities. In particular, the 60% increase to the maximum small scale trading limit, which is long overdue, should reduce the need for many charities to set up trading subsidiaries and minimise the risk of unexpected tax liabilities."
"With charity shops frequently refused full business rates relief, today’s confirmation that smaller shops will benefit from a one third reduction on their rates will be welcomed. However it is only a temporary measure (until the revaluations in 2021) and councils should ideally be encouraged to offer the full 100% discretionary relief."
"Whilst unlikely to impact on larger charities that already max out the benefits of the Gift Aid Small Donation Scheme, the increase from £20 to £30 is a positive step that we hope will help charities make better use of this under-claimed relief and also brings it in line with the contactless payment limit."
Alice Palmer, NFP Tax Manager
Budget response from Price Bailey
"I met with the Treasury this Summer, following my suggestion that the trading limit be increased for smaller charities to remove the need for smaller charities to have trading subsidiaries and I am delighted to see that the budget has announced that from April 2019 the upper limit for trading that charities can carry out without incurring a tax liability from £5,000 to £8,000 where turnover is under £20,000, and from £50,000 to £80,000 where turnover exceeds £200,000. This is fantastic news and will help many smaller charities not needing to set up trading subsidiaries. This limit has not changed for many years and we are really pleased to have influenced the update to the limits."
Helena Wilkinson, Partner
Budget response from Sayer Vincent
"It is great to hear that the Chancellor plans to help charities by increasing the annual limit for trading in a charity from £50,000 to £80,000 turnover (for charities with income over £200,000). This takes it very close to the VAT registration threshold of £85,000 so almost aligning these which is helpful.
In addition the decision to allow charities operating Retail Gift Aid to write to those whose donations raise under £20 a year, just once every three years rather than annually as at present, will save charities many thousands of pounds in administration and postage costs. Charity Tax Group was hoping the requirement to write would be removed altogether for these donors. However once every three years is much better than annually and HMRC does remain concerned that, with over 40% of adults not being tax payers, too often gift aid is claimed by non-taxpayers."
Helen Elliott, Partner
16:47 After an hour and twelve the chancellor has finished his speech. Now time to pour through the Red Book to find out everything that will impact the sector. We will also be providing comment and analysis from ourselves and our corporate partners which will be sent to all members. Watch this space!
16:42: Personal allowance tax threshold raised a year early. From April 2019 the personal allowance will be £12,500 with the higher rate threshold set to £50,000.
16:32 An additional £1bn package of measures over five years for Universal Credit. With work allowances increased by £1,000 per annum. With a reiteration that 'Universal Credit is here to stay'.
16:28 Aside from IR35 and the 'FANGS' tax (which the IFS estimate will raise an additional £400m). Very little on tax so far (famous last words!)
16:18 For the next two years all retailers in England with a rateable value of £51,000 or less will have their business rates cut by a third.
16:11 Bingo! IR35 gets a mention with the IR35 rules being rolled-out to the private sector delayed until 2020 and will only be applied to large and medium size enterprises. If your charity employs contractors off-payroll this could have significant consequences.
16:06 Some tweaks to the Apprenticeship Levy announced. The amount small businesses need to contribute will be halved from 10% to 5%. Potentially positive, but even more flexibility is needed to help the charity sector access the funds and utilize them in a way most appropriate to their charity.
16:04 PFI is no more
16:01 More information on productivity will be contained within the Red Book which accompanies the budget.
15:58 The chancellor states he can't give an exemption VAT, but that the Treasury will make a donation of £10m for the armed forces covenant fund trust for mental health of veterans with additional spending on village hall refurbishments. £1.7m for school education to mark the liberation of the Bergen-Belsen concentration camp.
15:51 They'll be more information on departmental spending in the Spending review next year, but the chancellor announces additional funding for Local Government on social care. An additional £650m for English Authorities, and a further £84m over the next four years to expand children's services. Given the sizable issues with social care this will be welcome, but much more is needed.
15:46 Improvements in public finances mean that the chancellor will set out a new path for public spending.He has set out RDel for departmental spend and in addition to the 1% extra there will also be a 'deal dividend', which will mean further funding for the Spending Review. With Local Government under strain this could be very significant for our sector. Let's hope they take into account
15:44 We shall henceforth always refer to the Chancellor as 'Fiscal Phil'.
15:42 More positive news with sustained real wage growth in each of the next five years.
15:41 While the growth figures were improving growth figures from the OBR. 1.6% in 2019 then 1.4% for 2020/21 1.6% for 2023. Still not particularly good news
15:40 £2bn more for departmental spend. Chief Secretary to the Treasury will announce allocations for departments. This could be really important for the sector
15:37 Getting Brexit right will create 'a double deal dividend' . More Brexit jargon for everyone to remember.
15:35 And now to the budget funnies (allegedly)
15:34 Hammond starts the budget by saying that following the tough decisions of the past few years 'Austerity is over'. What that means exactly is the key question.
15:31 And we're off!
15:24 We are nearing the end of Home Office questions and the chamber is starting to fill up. Now is the time to get your final tea before the Chancellor begins his speech...
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