The Budget – our one page summary and what charities need to know

The Chancellor announced the Budget on 16th March 2016. Here are the highlights as they apply to the charity and not for profit sector.

  • Allocation of £20 million to the First World War Centenary Cathedral Repairs Fund 
  • Allocation of £45 million from banking fines to military and health associated charities (30 charities named in the Budget) 
  • Allocation of £12 million from tampon tax to charities supporting women (19 charities named in the Budget)
  • Allocation of £100 million to provide ‘second stage’ accommodation for rough sleepers and domestic abuse victims and their families
  • Allocation of £10 million for Rough Sleeping Social Impact Bond
  • Allocation of £60 million from extra stamp duty land tax on second homes to Community Land Trusts
  • Applications for the next Coastal Communities Fund for projects starting in 2017-18 opens in summer 2016, supporting economic growth and jobs.
  • Exemption for charities from tax charge on qualifying loans or advances made by close companies to charity trustees for charitable purposes
  • Reform on Stamp Duty Land Tax (SDLT) on non-residential property to ensure that businesses buying high value properties pay a large sum of SDLT and businesses buying less expensive properties pay less SDLT
  • Increase of Employment Allowance from £2,000 to £3,000

Further good news was that the Chancellor did not announce any changes to the mandatory business rate relief for charities – which had been a material concern to the charity sector. Charities are still eligible for 80% mandatory relief, which can be topped up by a further 20% at the discretion of local authorities. 

The Budget did not however provide for support to charities in relation to the National Living Wage and Apprenticeships Levy. Both of these tend to burden small charities.

The increase in personal income tax allowance brings a reduction to the number of people who need to pay tax and who would otherwise have qualified to opt for Gift Aid. This may have a marginal impact on decreasing the level of Gift Aid that charities receive. 

The government plans to work on agreeing new mayoral devolution deals – whether or not this will benefit the charity-sector or certain charities who support particular groups of people or animals, may well depend on the mayor elected.