The Budget announcement by the Chancellor of the Exchequer on 16th March 2016 contained a number of measures relevant to charities and philanthropy.

  • Employment Allowance, which reduces the cost of employers’ National Insurance contributions for businesses and charities, will increase from £2,000 each year to £3,000 with effect from April 2016.
  • Banking fines – a total of £45 million of banking fines will be allocated over the next four years to a number of charities and good causes. In Scotland, this includes Scottish Cadets’ linked detachments in Scottish schools (£500,000), the Scottish Submarine Trust (£659,000) for the purposes of a new submarine service museum, and the co-funding of a new £5m leisure facility in Helensburgh.
  • A total of £12 million will be allocated to a range of charities and other good causes benefitting women, funded from the Tampon Tax Fund.
  • Close company loans or advances which are made by close companies to charity trustees for charitable purposes will not be subject to a tax charge. This change was announced previously in the Autumn Statement 2015 and will be backdated to apply from 25th November 2015.
  • The Government will include provisions in this year’s Finance Bill to allow intermediaries to have a greater role in administering digital Gift Aid, as announced in Budget 2015.
  • Unnecessary legislation relating to charity lump sum death benefits under pension schemes will be removed by this year’s Finance Bill.
  • Corporation Tax reliefs for orchestras will commence on 1st April 2016, as announced in last year’s Budget, and a consultation will be launched into a new tax relief for museums and galleries which is to be introduced from 1st April 2017. The museums and galleries relief will be available for temporary and touring exhibition costs. Museums and galleries will also be eligible for extended VAT refunds.
  • £5 million will be contributed by the Government towards the V&A Dundee’s fundraising campaign and £150,000 will be contributed towards local regeneration projects in New Cumnock.
  • Changes will be made in relation to items which enjoy an exemption fromEstate Duty under the pre-Inheritance Tax regime. The changes will mean that HMRC will be able to elect for the higher of the IHT or Estate Duty charges to apply where there is a chargeable event (including a death) on or after 16th March 2016. There will also be charges introduced on items which are exempt from Estate Duty but which become lost (unless the Commissioners are satisfied that the loss was outwith the control of the owner).
  • The power to add charities and other national institutions to the list of bodies contained in Schedule 3 to the Inheritance Tax legislation will be transferred from HMRC to HM Treasury. This is relevant to gifts for national purposes and private treaty sales.

Click here to read our full Budget response.

For further advice on any of these announcements, contact us at charities@turcanconnell.com.