Changes to gift aid, inheritance tax and mileage rates have been welcomed by sector leaders after a Budget announcement hailed as the “best Budget for charities in years”.
Caron Bradshaw, chief executive of the Charity Finance Directors' Group, was impressed by the prominence of charity matters in George Osborne’s speech this afternoon: “It’s refreshing to hear the Chancellor making reference specifically to the charity and voluntary sector rather than having to scrutinise the background papers for details of how announcements might impact us,” she said.
“There are a number of positive announcements which we are pleased to see and welcome,” she added, “not least the announcement of a move to online filing and gift aid simplifications for donations up to £5,000. We are also pleased to see the extension of mileage rates to passengers and the reduction in fuel duty which will be of help to charities in keeping overheads down.”
Charities Aid Foundation chief John Low went a step further in his praise stating: “The Chancellor has today delivered for charities and those who want to support them.
“The commitment to bring gift aid into the 21st century will revolutionise this important tax relief and go a long way towards reducing the £750m that goes unclaimed each year. We are also pleased to see they have implemented our recommendation to remove restrictions around thanking donors,” he added, referring to increased limits for in-kind services provided to major donors from £500 to £2,500.
The Philanthropy Review, which called earlier this week for gift aid to be able to be claimed automatically on small donations, praised the government for taking the suggestion on board but said it didn't go far enough.
Chair Thomas Hughes-Hallett said: "We welcome the intentions of the announcement concerning gift aid for small cash donations as this indicates that the government has recognised the need to release these funds to which charities are entitled.
"But we are disappointed at the very modest level of the threshold up to which gift aid can be claimed without the need for gift aid declarations. This means that any charity raising more than £5,000 in small cash donations will miss out."
But the Institute of Fundraising was more upbeat, calculating that the new allowance would give charities an extra £1,250 per year, to be received from 2013. It said it bore resemblance to the ‘gift aid light’ idea put forward to the government’s gift aid forum by its working party during 2010, and will make a significant difference to charities’ incomes.
The resounding discussion on social media platforms and in published comments surrounded legacy reforms. The public is being encouraged to donate after their deaths by a 10 per cent discount on the inheritance tax rate if 10 per cent is donated to a charity in a will. Accountants BDO commented that the new reliefs “chime with the Big Society”, while Urban Forum CEO Toby Blume and NCVO head of research Karl Wilding suggested that the change might mean that a greater number of small charities would benefit from legacies.
However, while Richard Woolich, tax partner at global law firm DLA Piper said "this is the best budget for charities in years", Acevo chief executive, Stephen Bubb, maintained a cautious outlook. “This budget leaves a legacy of better giving for generations to come. But now we need Govenrment to get a grip on local cuts so that today’s generation of charities is still around to benefit tomorrow," he said.
"I will also be making clear that in addition to the positive measures in the Budget, we need action now from the government to get a grip on local cuts to the voluntary sector. That is where Acevo will be focusing our efforts in the coming days," he added.
