Chancellor George Osborne’s Autumn Statement on 3 December contained a number of measures with implications for charities.
We have listed some of the key points below but for more detailed information and guidance on any charity issue, please contact us.
- The Autumn Statement confirmed that the government would refund VAT incurred by hospices and that from April 2015, UK search and rescue and air ambulance charities would be able to claim refunds of VAT paid on goods and services purchased for non-business activities.
- £50 million in LIBOR fines – imposed on some banks for attempts to manipulate the inter-bank borrowing rate – will go to benefit military charities and other good causes over the next six years.
- The government will continue a review of benefits allowed to charity donors, launched in the 2014 Budget, with the aim of simplifying existing rules. It will also be extended to examine the rules for claiming Gift Aid on membership and entrance fees. An update on the review is planned for the 2015 Budget.
- Charity employers taking on young people will not pay national insurance contributions (NICs) on any but the highest earning apprentices aged under 25 from April 2016. NICs will be scrapped for under-21s from April 2015.
- The government is to seek European Union approval to increase the annual investment limit for Social Investment Tax Relief to£5 million per annum per organisation, up to a total limit of £15 million, and to extend the relief to small-scale community farms and horticultural activities. It is intended the changes will come into effect on or after 6 April 2015. Individual investors can invest up to £1 million per year.
- There will be a full review of the future structure of business rates, reporting by the time of the 2016 Budget. The doubling of Small Business Rate Relief will also be extended until April 2016, with the inflation-linked increase in business rates continuing to be capped at two per cent until April 2016.
- An existing IHT exemption for members of the armed forces whose death is caused or hastened by injury while on active service will be extended to members of the emergency services and humanitarian aid workers responding to emergency circumstances. It will be effective for deaths on or after 19 March 2014.
- In April 2014, the government introduced the Employment Allowance, which allows employers to reduce their class 1 national insurance contributions (NICs) by a maximum of £2,000 in the tax year. From April 2015, the allowance will be extended from businesses, charities and amateur sports clubs to individuals employing care and support workers.
- The government will launch a consultation in early 2015 on introducing a new tax relief for orchestras from April 2016, in recognition of their cultural value and artistic importance.