Issues from Budget 2015 of particular relevance to charities.
Link to our coverage of the Summer Budget (8th July).
At 20th March, we added links (below) to two VAT refund schemes and a consultation on the Reform of the Landfill Communities Fund.
Charities will see the limit for Gift Aid claims from events etc., made “automatically” (without loads of paperwork) under the Small Donations Scheme (GASDS), increase to £8,000 from the current £5,000.
The Office for Civil Society will, in 2015-16, seek a partner to deliver subsidised fundraising training to small charities.
Information is still awaited information on whether the potential impact on charities’ trading subsidiaries of the diverted profits tax will be addressed in the regulations bringing this in. NCVO says “We should get a clearer picture when legislation is published next week alongside the finance bill.” See Civil Society News item for background to the issue. UPDATE: see Charity exemption to new Diverted Profits Tax for outcome.
The government is working with the Financial Conduct Authority, the Charity Investors’ Group and the Charity Commission to introduce a new Charity Authorised Investment Fund structure. This will be an alternative to Common Investment Funds with the advantage of FCA regulation, ensuring the same regulatory oversight and protections as funds for retail investors. Civil Society News explains further.
Further funding support: The church roof fund (announced in the autumn statement) is being trebled. Various Air Ambulances are to get new helicopters. Blood Bike charities will get their VAT refunded. More LIBOR fine funds are to go to regimental charities (see list in red Book extract).
See ‘5 things charities need to know about Budget 2015′ from NCVO for some more on the above. Charity Finance Group’s Budget blog is also worth a read, plus direct link to CFG Budget briefing (pdf, 271KB).
Further reading (added 20th March)
- There will be other accountancy firm round-ups for charities, but this came our way first, from Hacker Young.
- The deputy editor of Charity Finance has a go at answering ‘How was the Budget for the voluntary sector?‘.
Social venture capital trusts to get 30 per cent tax relief (Civil Society News).
Government document – an overview of the Budget 2015 announcements on Social investment tax relief and the design of a new Social Venture Capital Trust.
Wide ranging review of business rates system announced (Civil Society News).
Orchestra tax relief April 2016 at a rate of 25% – see last item under Red Book below.
HM Revenue and Customs is asking for comments on proposals for reform of the Landfill Communities Fund to improve the flow of funding to communities. Consultation runs to 10th June.
Some comment and extracted #volsecbudget tweets on the above and other Budget 2015 measures:
- From NCVO’s Karl Wilding: Extension of Gift Aid Small Donations scheme will only increase the amount of unclaimed relief if regs not simplified.
- New Charity Authorised Investment Funds could save charities up to £13 million a year.
- Far reaching reform on biz rates. This could have a significant impact on #charities.
- CFG_O’Brien comment: Personal allowance increase – again this is creating problems for #GiftAid with more people coming out of the tax base.
Civil Society News comment round-up includes anger at the omission of any mention of a promised £40m Local Sustainability Fund.
Third Force News reports Scottish sector body SCVO as welcoming “further support in the Budget for charities, particularly the extension of VAT rebates to hospices, search and rescue and some medical transport charities”, but disappointment that ‘headroom’ in public finances hasn’t been used to soften the cuts from the welfare budget.
Extract from Budget 2015 Red Book
Page 81, Charities
2.104 Gift Aid Small Donations Scheme (GASDS) – Secondary legislation will be introduced to increase the maximum annual donation amount which can be claimed through the GASDS to £8,000, allowing charities and Community Amateur Sports Clubs to claim Gift Aid style top-up payments of up to £2,000 a year, with effect from April 2016.
2.105 Subsidised fundraising training – The Office for Civil Society will take forward the procurement of a partner to deliver subsidised fundraising training to small charities in 2015-16.
2.106 Gift Aid digital – As announced at Autumn Statement 2014, the government will legislate to allow regulations to be made to give intermediaries a greater role in administering Gift Aid. (Finance Bill 2015)
2.107 Charitable status of certain bodies – Legislation will be introduced in Finance Bill 2015 to ensure that the Commonwealth War Graves Commission and Imperial War Graves Endowment Fund trustees continue to be treated as charities for tax purposes.
2.108 Charity Authorised Investment Funds – The government is working with the Financial Conduct Authority (FCA), the Charity Investors’ Group and the Charity Commission to introduce a new Charity Authorised Investment Fund structure that will bring new investment funds established for charitable purposes under FCA regulation, ensuring they receive the same regulatory oversight and protections as funds for retail investors.
2.109 Help for hospices – As announced at Autumn Statement 2014, hospice charities will be eligible for VAT refunds from 1 April 2015 and this will be legislated for in Finance Bill 2015. (o)
2.110 VAT refunds for search and rescue charities – The government announced at Autumn Statement 2014 that search and rescue, and air ambulance charities will be eligible for VAT refunds. This will be legislated for in Finance Bill 2015 and will take effect from 1 April 2015. (o)
2.111 Blood bikes – From 1 April 2015, blood bike charities will be included in the VAT refunds scheme, along with search and rescue, and air ambulance charities as previously announced at Autumn Statement 2014. (Finance Bill 2015)
2.112 Rapid response vehicles – The government will provide a grant to support charities providing rapid response vehicles for medical purposes.
2.113 The use of LIBOR fines – The government has committed £75 million of LIBOR fines over the next 5 years to support military charities and other good causes, including:
•• Burma Star Association: £250,000 to help support the remaining veterans from the Burma campaign
•• Veterans Specialist Mobility Fund: £3 million over 5 years to the Royal British Legion to support members of the Armed Forces across the UK with mobility injuries
•• Chavasse Report implementation: £2 million to pilot the implementation of the recommendations in the Chavasse Report for a network of NHS hospital based rehabilitation services for veterans and reservists
•• £25 million healthcare fund for aged veterans: A new £25 million fund, delivered through the Armed Forces Covenant Fund, specifically targeted for support to older veterans, including nuclear test veterans, to improve healthcare and awareness of medical issues as they get older
•• Afghanistan Regiments: £10 million allocated to armed forces charities on the basis of need arising from the Afghanistan campaign
•• RAF Biggin Hill Chapel Memorial: £1 million to ensure the chapel is maintained for future generations
•• Stow Maries Aerodrome: £1.5 million to secure the restoration of the UK’s only intact World War One aerodrome in the country and the base of the first Royal Flying Corps Squadron
•• World War One commemoration: £5 million to fund a number of further World War One commemorations including the Battle of Jutland, the Gallipoli Campaign and the Battle of the Somme
•• RAF Museum Hendon: £2.5 million to help secure the country’s primary national Air Force and flight museum
•• Afghanistan Memorial: £500,000 to match public donations for the new Iraq and Afghanistan war memorial planned for central London
•• Air Ambulance Package: £10 million to support a number of Air Ambulances nationally
•• Skill Force: £185,000 to extend the funding of Skill Force for a further year to provide a link between ex-service personnel and disadvantaged school children
•• 65 Degrees North: £100,000 to support 65 Degrees North to record the world’s first unsupported crossing of the Greenland icecap by an armed force’s veteran amputee
•• SIA Charities: £1 million to the 3 benevolent charities which support the work of the Intelligence Agencies
•• Project ADVANCE Plus: £5 million over the next 5 years for research into the psychological impact of battlefield injuries and severe battlefield trauma
•• Mental Health Wiltshire: £3.5 million to provide a dedicated support pathway, work and accommodation for veterans in Wiltshire
•• Bristol Aerospace Centre: £2 million to create a new museum to commemorate the UK’s flying heritage at Filton in Bristol
•• Agincourt 600: £1 million to support the commemoration of the 600th anniversary of the Battle of Agincourt
•• Rothiemurchus Lodge: £250,000 to renovate this community, regular and ex-regular member of the armed forces accommodation and activity centre
•• VE Day: up to £2 million to support the 70th anniversary commemoration of VE Day
•• Waterloo 200: £1 million to support the commemoration of the 200th anniversary of the Battle of Waterloo
Other Red Book sections
2.78 Social investment – The government will set the rate of Income Tax relief for investment in Social Venture Capital Trusts (Social VCT) at 30%, subject to state aid clearance. Investors will pay no tax on dividends received from a Social VCT or capital gains tax on disposals of shares in Social VCTs. Social VCTs will have the same excluded activities as the SITR. The government will legislate for Social VCTs in a future Finance Bill. The government will change the regulatory status of SITR funds so that they can be promoted on the same basis as EIS funds. (Future Finance Bill) (m)
2.121 Corporation Tax: orchestra tax relief – The government will provide tax relief to orchestras at a rate of 25% on qualifying expenditure from 1 April 2016. The government has consulted on the design of the relief and a summary of responses will be published shortly. (Future Finance Bill) (17)