Funding news

What does the Budget mean for the sector? - 21 March 2012

A cap on tax relief claimed by people making gifts to charity, a review of retail Gift Aid, £40m for the advice sector and the scrapping of a VAT exemption for alterations to listed buildings were among the major announcements.

The government will provide £40m for civil society advice services over the two years from 2013 to 2015, “to support the sector as it adapts to changes in the way that it is funded”, it announced today as part of the Budget.

Other announcements included:

Gift aid small donations scheme - This Budget has doubled the maximum donation amount on which charities will no longer have to obtain signed gift aid declarations for in order to qualify for the relief, to £20. The total amount able to be claimed for remains at £5,000 as announced in the last Budget, and this benefit will be introduced from April next year.

Charity shop donations – The government will work with the charity sector to simplify the administration of gift aid in the context of charity shops.

Social investment – The Treasury will conduct an internal review looking into the financial barriers to social enterprise.

VAT on charitable buildings – The government will withdraw charitable buildings from the scope of the VAT reduced rate for the supply and installation of energy-saving materials.

In-year repayments of tax to charities – The government will legislate to amend Community Amateur Sports Clubs (CASCs) and gift aid legislation “to ensure it operates as originally intended and to put on a statutory footing the practice by certain charities and CASCs of making claims for repayment of income tax including gift aid outside a tax return”.

Community Investment Tax Relief (CITR) – From April 2013, the government will relax the CITR on-lending requirements that currently place conditions on the speed with which Community Development Finance Institutions must on-lend the funding they receive, and introduce new rules to allow investors to carry unused relief forward.

Red tape - The government will launch sector-based reviews of regulation from April 2012 to ensure regulation is enforced at the lowest possible cost to business, starting with volunteer events, among others.

Health and safety - 84 per cent of health and safety regulation is to be scrapped. This will include a new law this year meaning that employers will no longer be held to be in breach of their duties when they have done everything that is reasonably practicable and foreseeable to protect their employees.

Capping tax reliefs -The government also announced new measures to cap tax reliefs which aim to prevent rich people from using such reliefs to greatly reduce their tax liabilities. It admitted that this may impact on charitable donations. For anyone seeking to claim more than £50,000 of reliefs, a cap will be set at 25 per cent of income. The government said it will explore with philanthropists ways to ensure that this measure will not impact significantly on charities that depend on large donations.

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