What did the Autumn Budget bring for charities?

Chancellor Phillip Hammond has delivered his highly-anticipated Autumn Budget, but what did it have in store for charities?

Taxes

Among some of the main changes to affect the charity sector, the government has pledged to “reduce administrative burdens on charities” by introducing a “package of measures” from April 2019.

The Budget document revealed these measures will help to increase 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.

Furthermore, they claim to allow charity shops using the Retail Gift Aid Scheme to send letters to donors every three years when their goods raise less than £20 a year, rather than every tax year.

The package of measures is also set to allow charities to increase the individual donation limit under the Gift Aid Small Donations Scheme to £20, which applies to small collections where it is impractical to obtain a Gift Aid declaration.

In a statement published on its Twitter page, the Charity Tax Group said: “This at least shows that the Government recognises that irrecoverable VAT provides an obstacle for charities - we now a more strategic review of the wider impact on the sector and the political will to resolve this long-term problem.”

IR35

The Chancellor has also announced the extension of IR35 off-payroll working to the private sector has been put back until 2020 and will only apply to large and medium sized businesses.

The Charity Tax Group said this delay will help charities "who need time adapting to these new requirements", but CFG chief executive Caron Bradshaw argued the amends will require thought as to how any changes will impact charities "such as theatre companies".

IR35 amends - need to think about how any changes will impact some charities - like theatre companies. #volsecbudget #budget2018
— caron bradshaw (@caronlb) October 29, 2018

Funding

While announcements surrounding funding for charities were minimal, the Budget document revealed the government is set to provide £15 million to charities and others to distribute around 250 million meals’ worth of accessible edible food that is currently “needlessly wasted every year”.

Mental health also received a mention in the Chancellor’s speech this year, with the government pledging to grow funding for mental health services as a share of the overall NHS budget over the next five years.

However, dormant assets failed to make an appearance in the statement, despite many charities campaigning for more funds to be released for charitable activity.

The sector has long been waiting for an annoucement about how the government intends to further spend up to £2bn in dormant assets, but are yet to receive any further information.

Earlier this year, leaders from a number of charitable organisations, including the NCVO, ACEVO and the Small Charities Coalition, wrote to Hammond asking for him to take "substantive action" on dormant assets as per the government's intentions in its civil society strategy.

"We are calling for this funding to be designated for the purpose of strategic, long-term investment in civil society organisations," the leaders said in their letter to the Chancellor.

"There are a number of ways in which dormant assets funding could be directed to support this long-term vision, including through investment in community ownership of land and buildings, endowments to community foundations, and strategic investment in skills and capacity building around income generation and fundraising."

The sector’s response

In a statement published on Twitter, the Small Charities Coalition said: “We’re disappointed that today’s Budget included minimal mention of charities. The benefits of the voluntary sector on society must be recognised. We’ll make sure we shout even louder for #smallbutvital charities over the next year.”

NCVO director of public policy and volunteering, Karl Wilding added: “A very political, populist budget. Straight from the George Osborne playbook. Wonder if it will unravel as quickly as some of Osborne’s?”