Key Budget 2012 Announcements Affecting the Charity Sector

26th March 2012

The Chancellor, George Osborne, has today announced measures in his Budget Statement to reward work and back business.

Little mention of the charity sector in the Statement and concerns over the Chancellor's announcement of a cap on personal tax relief has led many stakeholders to argue that the sector has fallen off the Government's agenda. Budget announcements of key importance to the sector include: Not-for-profit advice sector. The Government will give £40 million (£20 million per year from 2013 to 2015) to the not-for-profit advice sector "to support the sector as it adapts to changes in the way that it is funded". Charity shop donations. The Government will work with the charity sector to simplify the administration of gift aid in the context of charity shops. Gift Aid Small Donations scheme. A new Gift Aid small donations scheme will be introduced from April 2013. This was announced last year and it will enable charities to claim a Gift Aid style top-up payment on up to £5,000 of small donations without having to get Gift Aid declarations. Charities will be able to claim the new payment on donations of £20 or less. VAT on charitable buildings. The Government will charge VAT on improvements to listed buildings. In-year repayments of tax to charities. The Government will legislate to amend Community Amateur Sports Clubs (CASC) 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. New cap on tax relief. A cap of £50,000 on tax relief, or 25% of a person's income has been set. People will not be able to claim tax relief worth more than a quarter of their income, including higher-rate relief on gifts to charities, unless they are claiming less than £50,000. Social investment. The Treasury will conduct an internal review looking into the financial barriers to social enterprise. Further details of Government policy affecting the charity sector are reported on POLICYfinder, our one-stop-shop for policy information.

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