There wasn’t a huge amount in the Budget this spring which affects charities and other not-for-profit entities, but a few things that those operating in the sector should be aware of.
Where charities are operating payroll, the NIC threshold has been increased to £9,500 and the national minimum wage increases to £8.72 for over 25’s from April 2020. Also, the employment allowance has been increased from £3,000 to £4,000 from April 2020 for those eligible charities with national insurance liability of £100,000 or less.
A welcome relief on the VAT front, which may benefit some charities, is that the Budget announced a change to zero-rate digital publications so that books, newspapers and other reading material will no longer be standard rated.
In terms of compliance, to aid business in the current coronavirus outbreak, time to pay arrangements from HMRC will be more readily available and Companies can request a 3 month extension to their filing deadline from Companies House. The Charity Commission has not announced a similar extension.
Structures and Building Allowance has also been increased from 2% to 3% which applies where an entity has constructed their own building to use and there may be charities that this would apply to. Also large charities undertaking research and development will benefit in an increase to the R&D Expenditure Credit from 12% to 13%.
The Government also announced a fundamental review of business rates will be undertaken. Whilst it is expected that they will look at the valuation bands of business rates, we do not know the extent of the review and how this may affect charities, in particular the reliefs that charities are currently able to claim.
In terms of Government funding for the sector the Budget built on the previous commitment of £7.1 billion cash increase in funding for schools by 2022-23. The Budget provides for £29 million to support primary school PE teaching and to help schools make the most of their sports facilities. £90 million per year funding has been announced to introduce an arts premium from September 2021 to help schools provide high-quality arts programmes and extra-curricular activities for pupils. A further £1.5 billion over 5 years was announced in capital spending to refurbish further education colleges and a new £2.5 billion National Skills Fund to improve adult skills, to create new IT technology centres and 11 new maths schools.