Funding news

Budget Update - 23 March 2011

A number of major new initiatives affecting charities were announced which Osborne described as “the most radical reforms to charitable giving for more than 20 years".

The big news for the voluntary sector in the Budget was the announcement of a range of measures to encourage charitable giving and philanthropy.

Other big changes were:

  • Promoting legacy giving – the rate of inheritance tax will be reduced by 10 per cent for those estates leaving 10 per cent or more to charity, from a rate of 40 per cent to 36 per cent. This is likely to mainly benefit larger well-known charities, as they are far more likely than smaller charities and community groups to receive legacy donations.
  • Increasing the Gift Aid benefit limit from £500 to £2,500 from April 2011 to enable charities to give ‘thank you’ gifts (i.e. the ‘benefit’) and to recognise the generosity of significant donors.
  • Consulting on proposals to encourage donations of pre-eminent works of art or historical objects to the nation in return for a tax reduction (details still to be specified, presumably in part through the consultation process).
  • A commitment to introduce a new and simpler system of online filing for Gift Aid. The Chancellor said this would be in place by 2013, but that date is not in the text of the budget document. The document also announced that ‘intelligent’ forms (which contain automatic checks) would be published ‘shortly’.
  • A Gift Aid small donations scheme. This will allow charities to claim Gift Aid on up to £5,000 of small donations per year without the need to submit Gift Aid declaration forms. Depending on the details, this has the potential to significantly boost fundraising for small charities, which are less likely to claim Gift Aid because of the paperwork.
  • The Government will explore how to increase the take up of Payroll Giving, which allows individuals to give through their pay and reduce their income tax bills.

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For more updates see: Civil Society website and Third Sector update.

Download the full Budget 2011 document.