The Chancellor’s Autumn Statement today contained a number of benefits and opportunities for charities, including the extension of VAT rebate schemes to hospices and search and rescue charities, and efforts to improve the Gift Aid system.
VAT refunds for hospices
The Chancellor has acted to remove VAT anomalies for hospices which could be worth at least £4 million to more than 200 hospice charities. The government will now refund the VAT that hospice charities incur. This brings local hospice charities on to a level playing field with other providers of palliative care.
David Praill, Chief Executive of the charity Hospice UK, said:
“Hospice UK, working with Sue Ryder and the Charity Tax Group, have been calling for this anomaly on VAT recovery to be addressed since 2011. It is only right that there is a level playing field between local hospice charities and other providers of palliative care.
“This rebate scheme recognises the unique contribution of charitable hospices to the health economy and also the invaluable support of local people who give their time to support hospices through fundraising and volunteering.”
VAT refunds for search and rescue charities and air ambulances
UK search and rescue and air ambulance charities will also similarly benefit from the right from April 2015 to claim refunds on VAT that they have paid on purchases of goods and services for their non-business activities.
These charities were not receiving that same VAT treatment as Government-funded organisations.
This change could save around 150 charities up to £5 million a year.
An RNLI spokesperson said that this “will benefit all emergency response charities and in turn enable more lives to be saved. This will also mean the RNLI will now be on the same tax footing as their emergency service colleagues, such as the police, fire service and coastguard agencies”.
The Institute of Fundraising is still seeking confirmation on some of the detail, including whether the VAT refunds will include fundraising costs on materials and activities as it called for in its manifesto in July this year.
The Government will publish draft legislation to allow regulations to be made which give intermediaries a greater role in administering Gift Aid. At present there are concerns about donor data transfer, enduring declarations and liability.
The Government has also committed to continuing and extending the review of donor benefits launched at Budget 2014 to include consideration of the rules for claiming Gift Aid on membership and entrance fees.
Peter Lewis, CEO Institute of Fundraising, commented:
“The ongoing work following the Gift Aid and Digital Giving consultation is progressing and we will continue to work with the Treasury and HMRC to put forward our views on how this can work best for charities and donors to maximise uptake on eligible donations. We will also be working closely on the review of benefits for Gift Aid to see how this can be most effective”.
— ACEVO (@ACEVO) December 3, 2014
Tax relief for orchestras
The Government will launch a formal consultation in early 2015 about introducing a new tax relief for orchestras from April 2016, in recognition of their cultural value and artistic importance.
Church Roof Repair Fund
The Government will provide £15 million for a new Listed Places of Worship: Roof Repair Fund to support the maintenance of church roofs in 2015.
It will be available to churches across the whole of the UK.
Financial misconduct fines donated to charity
Over the next six years the Government will grant a further £50 million of fines levied on banks for manipulating LIBOR to support military charities and other good causes.
This includes a £3m grant to an East End hostel run by Veterans Aid, beneficiary of the current Evening Standard Christmas Appeal, and announced on the front page of today’s issue.
The Charity Tax Group, which has over 500 charity members, today welcomed these announcements. Several of them had been proposed in the organisation’s Autumn Statement submission.
The HM Treasury Autumn Statement 2014 can be downloaded as a PDF.
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