While it is disappointing not to see any specific tax measures introduced to support charities, it is reassuring to the charity sector that important reliefs such as Charity Rates Relief and Gift Aid continue in full effect against a challenging backdrop for the wider economy. Additionally, a range of new public spending measures announced could see many charities and not for profits stand to gain.
As a response to the Coronavirus, the Chancellor announced a £12 billion plan to support those affected through measures aimed at public services, individuals and business. These measures are welcome and go beyond what was expected.
Of direct interest to the charity and not-for-profit sector is the government refund of Statutory Sick Pay to businesses with less than 250 employees as well as a 100% business rates discount for 2020/21 in respect of properties with a rateable value of less than £51,000 (now extended to cover the leisure and hospitality sectors as well as retail). Additionally, the Government are introducing small business grants of £3,000 for those already receiving Small Business Rate Relief and Rural Rate Relief.
Other spending and tax measures introduced follow the Government agenda of 'getting things done', 'levelling up the country' and 'investing in our public services'.
Specifically of interest to charities and not for profits are:
- Healthcare; £34 billion a year has been pledged to the NHS by 2024 plus funding to increase GP surgeries.
- Education; £7.1 billion increase in schools funding by 2022-23 to include £29 million on sports/PE and £90 million on arts programmes. Further education colleges to receive £1.5 billion over five years for capital refurbishment and a new £2.5 billion National Skills Fund for adult skills plus eight new Institutes of Technology and 11 maths schools.
- VAT; from December 2020 the zero-rate tax will be extended to digital publications and the 5% VAT on women’s sanitary products will be scrapped.
- National Insurance; the Employment Allowance will be increased from £3,000 to £4,000 with effect from April 2020. You can read more about this here.
- Housing and welfare; a £12.2 billion Affordable Homes programme, a £3.6 billion Towns Fund to support regeneration and £643 million of additional support to provide affordable accommodation for rough sleepers.
- Transport; £27 billion towards a new Road Investment Strategy and a £500 million Potholes Fund
- Environment; a £640 million fund for afforestation and £25 million for the creation of Nature Recovery Areas.
- Research and Development; an increased investment of £22 billion a year was pledged for R&D, you can read more about this here. Charities can benefit from R&D tax credits through their trading subsidiary companies.
Read more on the Budget here.
While it is disappointing not to see any specific tax measures introduced to support charities, it is reassuring to the charity sector that important reliefs such as Charity Rates Relief and Gift Aid continue in full effect against a challenging backdrop for the wider economy. Additionally, a range of new public spending measures announced could see many charities and not for profits stand to gain.
As a response to the Coronavirus, the Chancellor announced a £12 billion plan to support those affected through measures aimed at public services, individuals and business. These measures are welcome and go beyond what was expected.
Of direct interest to the charity and not-for-profit sector is the government refund of Statutory Sick Pay to businesses with less than 250 employees as well as a 100% business rates discount for 2020/21 in respect of properties with a rateable value of less than £51,000 (now extended to cover the leisure and hospitality sectors as well as retail). Additionally, the Government are introducing small business grants of £3,000 for those already receiving Small Business Rate Relief and Rural Rate Relief.
Other spending and tax measures introduced follow the Government agenda of 'getting things done', 'levelling up the country' and 'investing in our public services'.
Specifically of interest to charities and not for profits are:
- Healthcare; £34 billion a year has been pledged to the NHS by 2024 plus funding to increase GP surgeries.
- Education; £7.1 billion increase in schools funding by 2022-23 to include £29 million on sports/PE and £90 million on arts programmes. Further education colleges to receive £1.5 billion over five years for capital refurbishment and a new £2.5 billion National Skills Fund for adult skills plus eight new Institutes of Technology and 11 maths schools.
- VAT; from December 2020 the zero-rate tax will be extended to digital publications and the 5% VAT on women’s sanitary products will be scrapped.
- National Insurance; the Employment Allowance will be increased from £3,000 to £4,000 with effect from April 2020. You can read more about this here.
- Housing and welfare; a £12.2 billion Affordable Homes programme, a £3.6 billion Towns Fund to support regeneration and £643 million of additional support to provide affordable accommodation for rough sleepers.
- Transport; £27 billion towards a new Road Investment Strategy and a £500 million Potholes Fund
- Environment; a £640 million fund for afforestation and £25 million for the creation of Nature Recovery Areas.
- Research and Development; an increased investment of £22 billion a year was pledged for R&D, you can read more about this here. Charities can benefit from R&D tax credits through their trading subsidiary companies.
Read more on the Budget here.
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12 March 2020
Luke Savvas
