Key points and reaction from the charity sector to yesterday’s budget

Civil Society News has published a useful summary of the charity sector’s largely critical reaction to yesterday’s budget. You can find the full article at this LINK to the Civil Society News website. 

“Civil society organisations have reacted to the Chancellor’s latest spring budget, with several groups lamenting a lack of measures to help the charity sector.

“The Chancellor outlined the government’s tax and spending plans, including a further cut to National Insurance, an increase in the VAT registration threshold, and protections for charities claiming gift aid.”

Key take-outs from the Spring 2024 budget include:

o The budget says the government will amend gift aid legislation due to implications of the digital markets, competition and consumers bill.

– Sector experts previously warned that the bill could deprive membership charities of their current ability to claim gift aid on members’ subscriptions. But the budget says the government will amend existing gift aid legislation by statutory instrument so that charities can continue to claim it while complying with the bill, when it comes into force.

o He pledged £45m through the Medical Research Charities Early Career Researchers Support Fund into medical research into diseases such as dementia, cancer and epilepsy, including £3m for Cancer Research UK (CRUK).

o Hunt announced cuts to National Insurance for workers by another 2p in the pound, after it also fell by 2p in last year’s autumn statement. This will mean the main rate falling from 10% to 8%, he said, which could save the average worker around £450 a year.

– Self-employed National Insurance will drop from 8% to 6%, while Hunt said the long term plan would be to continue to cut National Insurance contributions.

o Hunt added for some people the “best way to resolve debts is through a debt relief order but getting one costs £90, which can deter the very people who need them the most”.

– The Chancellor said he had listened to Citizens Advice and abolished the £90 debt relief order charge.

o He also announced an increase to the repayment period for new loans from 12 months to 24 months.

o The Household Support Fund, which allows local councils to help families via food banks, warm spaces and food vouchers, will be extended beyond 31 March. It will continue for six months.

– Hunt also said he had been listening to the Joseph Rowntree Foundation and the Trussell Trust and he has decided “with the battle against inflation still not over – now is not the time to stop the targeted help it offers”.

o Fuel duty will remain at its current rate and be frozen for the next 12 months, and the Chancellor will also extend a temporary 5p cut on fuel duty which was due to end this month.

o Hunt also awarded funding to the National Theatre, £26m, to improve in stages.

o The chancellor also announced an additional £2.5bn for the NHS in the coming year, and said the investment needed to modernise NHS IT systems will cost £3.4bn – though will unlock £35bn of savings.

o Hunt pledged £105m over the next four years to build 15 new special free schools.

o He also announced changes to child benefits, to a household system, which is to be introduced by April 2026. The changes will include, from this April, a threshold rise to £60,000 (from £50,000). Hunt will raise the top of the taper at which it is withdrawn to £80,000.

o Hunt announced that the VAT registration threshold would increase from £85,000 to £90,000, which could mean some charities pay less tax and do not have to comply with VAT regulations. 

The article in Civic Society News includes reaction to the budget from the National Council for Voluntary Organisations, Locality, the Directory of Social Change, Pro Bono Economics and others, 

The overwhelming reaction from the sector has been that the Spring budget represents a ‘missed opportunity’ by the government to help it meet rising costs and demand.

The full article can be found on the Civic Society News website.