Judging by the number of times the word charities appeared in the main budget document, this may not appear to be a budget with big announcements for the sector, with just four mentions. There were, however, a number of specific measures which impact the sector.
Completing the Libor Charity Funding Scheme
A further £36 million of banking fines will be distributed over the next three years to armed forces, emergency services and other charities, completing this funding scheme. Over £5 million of banking fines will be distributed in Scotland, Wales and Northern Ireland. Projects to benefit include mental health support for veterans in the Scottish Highlands, training for veterans in north east Wales and support for injured police officers and their families in Northern Ireland.
A total of £773 million of funding has been committed from this source since 2012.
Modernising poppy factories
Continuing the focus on armed forces/veterans, the UK Government committed £4.7 million to modernise the poppy factories in Edinburgh and Richmond.
VAT refunds for accident rescue charities
A grant was announced to help accident rescue charities cover the cost of VAT which is normally irrecoverable. This could be welcome news for air ambulance and mountain rescue charities.
Reducing single-use plastics – could charities benefit?
After the success of the plastic bag charge in reducing the use of plastic bags, the UK Government plans to launch a call for evidence in 2018 on how the tax system could reduce the amount of single-use plastics waste (eg. bottles). Charities have benefitted from the 5p plastic bag charge, and it’s possible similar arrangements may emerge in other areas.
Gift Aid donor benefit rules – changes from April 2019
Donors can receive a benefit from a charity they are donating to, and still claim Gift Aid on the donation, up to certain limits. Currently, there are three monetary thresholds, and from April 2019 this reduces to two, intended to simplify the rules for charities to administer.
Alcohol abuse and targeted measures
A new duty band for cider and perry between 6.9% and 7.5% strength was announced, for implementation in 2019. This forward announcement means producers could avoid the new charge by reducing the strength of their products.
Additional community support after the Grenfell Tower fire
The budget announced £28 million of additional money to support those affected by the fire, including mental health services and a new community space.
Homelessness
There were three announcements linked to rough sleeping. The UK Government stated its aim to halve rough sleeping by 2022, and eliminate it by 2027. Three pilot schemes funded with £28 million in Manchester, Liverpool and the West Midlands were announced; and £20 million of extra funding was announced for schemes to support people at risk of homelessness to help with access to a private sector tenancy.
Inheritance tax update
In a separate document issued on budget day, HM Revenue and Customs published research undertaken into inheritance tax reliefs. While the charity exemption was not a primary topic for the research, it did emerge in one example. This involved an individual aged 45 – 54 who was quoted as saying: “I’m not married and I have no children...I’d imagine some would go to charity. My mum has Alzheimer’s and the Alzheimer’s Society do a lot of work so that would be one for that.”
This acts as a reminder of the value to charities of legacies in wills. Inheritance tax receipts are projected to rise to £6.5 million by 2022/23. Encouraging donors to include an inheritance tax-free legacy in their will continues to be a way for many charities to diversify their income.
Julie Hutchison is the charities specialist at Standard Life Wealth. Tweet @juliekhutchison
