There have been concerns in the run up to the recent spending review that £320m would be cut from the Big Lottery Fund to pay for projects currently paid for out of the Department for Culture, Media and Sport budget. Fortunately those fears have not been realised as Chancellor George Osborne announced an increase in funds for the Arts Council, national museums and galleries, and BBC World Service. “And all of this can be achieved without raiding the Big Lottery Fund as some feared,” Osborne said. “It will continue to support the work of hundreds of small charities across Britain.”
Further points of interest for charities include:
Charity Commission funding frozen until 2020
Funding for the Charity Commission will be frozen over the next four years. The current level of funding will remain the same up to 2019-20. This is likely to result in a cut in real terms as inflation is taken into account however William Shawcross, chair of the Commission, said:
“This settlement – a freeze, not a cut – is recognition of the importance of the commission’s work. The recent high profile charity crises and the damage these have done to trust in charities show the importance of an effective charity regulator.”
Gift Aid Small Donations Scheme review
The Gift Aid Small Donations Scheme (GASDS) is set for review by the government to ensure it is operating effectively. This applies to the top-up payments that eligible charities and CASCs have been able to claim on small cash donations of £20 or less without having to obtain a Gift Aid Declaration.
Close company loans to participators: charities partial exemption
Legislation will be introduced that means charities will not have to pay tax on loans or advances made by close companies for charitable purposes.
Business rates review
The government will report on its review of business rates at the 2016 Budget.
Charities and CASCs are entitled to mandatory relief from business rates of 80%, with billing authorities having discretion to grant relief of up to a further 20%. The outcome of the review could have a significant impact on the charity sector.
Expanding support for social impact bonds
Funding for Social Impact Bonds will provide £80m of the £105m total to funding locally designed schemes tackling issues such as youth unemployment, homelessness, and mental health.
Expansion of National Citizen Service
Greater funds have been set aside to create more places for the National Citizen Service. The government aims to deliver up to 300,000 places by 2019-20, which will support a large number of charities and third sector providers.
Further support for military charities from banking fines
The government has committed to use a further £25 million from fines imposed on banks over the next three years to support military charities and other causes.
VAT on sanitary products: women’s charities fund
The government has announced a new fund to make £15 million a year, equivalent to the annual VAT raised on sanitary products, available to support women’s charities over the course of the current Parliament or until it secures an amendment to EU rules to enable the UK to apply a zero rate of VAT for such products.
Museums and galleries tax relief
The government will explore the introduction of a corporation tax relief for museums and galleries, to encourage the sector to create new exhibitions and display their collections to a wide audience.
Consultation on corporation tax relief for contributions to grassroots sport
The government will consult on expanding the circumstances in which a corporation tax deduction can be made for contributions to grassroots sport.
Tamsin Mann is a solicitor based in St Austell and advises charities on a broad range of legal issues. If you have any questions please contact 01726 74433 or enquiries@stephens-scown.co.uk.