Quick roundup of the Autumn Statement

Here is an overview of some of the measures announced in the Autumn Statement that will affect charities.

Growth and the deficit

The Chancellor confirmed the good news that the economy is due to grow faster than previously expected. Growth for this year has risen from 0.6% to 1.4% and next year’s growth is predicted to be 2.4% up from 1.8% according to the Office of Budget Responsibility.

The Chancellor also announced that the government would make a commitment to run a budget surplus from 2018/19 and to use the surplus to pay down debt. This means that austerity measures will not be eased, even if the economy continues to recover. Current plans are for further central government cuts that we expect would have an impact on public services.

Welfare cap

The government has confirmed that a new cap will be announced once a year alongside the Autumn Statement with the government reporting back on the measures taken to meet the cap. Parliament will also be forced to vote on any changes to the welfare cap level or if the government has breached the cap. NCVO has been working with a group of leading charities to analyse these proposals and we will be taking up this issue when the group meets with the Economic Secretary to the Treasury shortly.

Changes to JSA benefits

The government has re-announced the Help to Work scheme for JSA claimants who have been on the Work Programme for two years. In addition to the Help to Work scheme, 18 to 21 year olds will be asked to take up full time work after six months maintaining “local green spaces, clear up litter or work for a local charity” with this being backed up by sanctions. Further NCVO analysis will follow on this later.

National Insurance Employer Contributions

Employers (including charities) will not have to pay employer contributions for any staff under the age of 21 in order to tackle youth unemployment. This is good news.

Social Investment Tax Relief

A new Social Investment Tax Relief (SITR) will come into effect from April 2014 with consultation to take place on draft legislation to be published shortly. It will include charities and will cover a range of “equity and debt instruments” as well as social impact bonds. A road map on expanding the SITR will also be published in Jan 2014.

Gift Aid simplification

The government will be taking steps to make the Gift Aid declaration simpler and will be consulting on charities about how this should be done – NCVO has been invited to roundtable discussion with the Economic Secretary to the Treasury to discuss these improvements. The government will also be looking at ways to boost the role of intermediaries in the Gift Aid to reduce the number of declarations individuals need to sign.

Business rates

The Chancellor confirmed that business rates would be capped at 2% next year across England and Wales. Charity shops will also benefit from a potential discount of up to £1,000 on business rates for their premises if it is worth less than £50,000.

Charities will also benefit from the reoccupation relief if moving into a premise that was previously vacated.

Tax avoidance

The government announced a raft of measures to reduce tax avoidance including announcing that legislation to amend the definition of a charity for tax purposes. This change will aim to “put beyond doubt that entities established for purpose of tax avoidance are not entitled to claim charitable reliefs”.

Stamp Duty Land Tax: Charities Relief

Today’s statement confirms that charities are able to claim partial relief from Stamp Duty Land Tax where a charity purchases property jointly with a non-charity – they will be able to claim relief in proportion to the amount they contributed.

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Andrew was NCVO’s senior policy officer. He covered issues around funding, social investment, tax and the impact of the economy on the voluntary sector. Andrew has left NCVO, but his posts are kept here for reference purposes.

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