Budget Roundup: All the new funding and tax reliefs

16 Mar 2016 Voices

We round up all the significant measures in the Budget, including protection for charity rate relief, a tax break for museums and galleries, and £60m for community land trusts.

We round up all the significant measures in the Budget, including protection for charity rate relief, a significant tax break for museums and galleries, and £60m for community land trusts.

Today’s Budget is low on significant news for the sector. On the one hand, charities must remain concerned about an environment of continued cuts to benefits for poor and vulnerable people, and cuts to government spending.

On the other, there are a number of small funding boosts for the sector. Taken together they are probably worth around £300m over the life of this government.

One of the most significant positives is in an area where nothing happened. Charities had been concerned in the lead up to the speech that the Chancellor’s plans for business rate rules could affect the charitable rate relief worth £1.5bn a year – the sector’s single largest tax break.

There was another little-heralded announcement with potentially significant benefits. Many charitable museums will now be able to reclaim VAT on the cost of most goods and services.

Depending on how many charities decide to offer free entry, this could raise substantial funds. The relief is not costed in the Budget documents.

Museum charities registered with the Charity Commission spend around £300m a year, according to NCVO figures. Most of this spending would be eligible for VAT relief.

Not all organisations meet the criteria – opening at least 30 hours, accredited with the Arts Council, and offering free entry – but most of the larger ones either do, or could start doing so.

Then there were many other pots of funding - £60m for community land trusts, which develop affordable housing for local people, and £20m of funding for cathedrals. The Chancellor also announced his now-customary pots of funding from the sector from Libor fines and the tampon tax. We have published a full round-up of beneficiaries.

And for those questioning the logic of how such awards are made, Alice Sharman’s recent analysis offers a little clarity.

Full list of measures in the Budget

1.127 The government will provide £60m of the additional receipts from higher rates on additional residential properties to enable community-led housing developments, including through Community Land Trusts, in rural and coastal communities where the impact of second homes is particularly acute.

2.15 The use of banking fines – The government has committed £45m of banking fines over the next 4 years to support military charities and other good causes,

2.16 Tampon Tax Fund for women’s charities – The government is committing £12m of funding to support a range of good causes benefitting women,

2.43 Close company loans to participators: partial exemption for charities – As announced at Spending Review and Autumn Statement 2015, following consultation the government will legislate so that a tax charge is not applied to loans or advances made by close companies to charity trustees for charitable purposes. This will apply to qualifying loans or advances that are made on or after 25 November 2015. (Finance Bill 2016)

2.45 Gift aid digital – As announced at March 2015 Budget, the government will legislate to give intermediaries a greater role in administering Gift Aid. (Finance Bill 2016)

2.53 Technical amendments to support Pension Freedom and Choice Reforms – The government will consolidate pension flexibilities to ensure that these are working as intended, including by removing unnecessary legislation relating to charity lump sum death benefits. (Finance Bill 2016)

2.87 Corporation tax: museums and galleries tax relief – The government will introduce a new tax relief for museums and galleries from 1 April 2017 following a consultation over summer 2016. The relief will be available for temporary and touring exhibition costs. (Finance Bill 2017)

2.88 Corporation tax: orchestra tax relief – As announced at March Budget 2015, the government will provide tax relief to orchestras at a rate of 25 per cent on qualifying expenditure from 1 April 2016. (Finance Bill 2016)

2.151 DCMS extension of museum VAT refund eligibility – The government will broaden the eligibility criteria for the VAT refund scheme for museums and galleries. DCMS today publish guidance on the new criteria, which will enable support to a wider range of free museums from across the UK.

2.152 VAT refunds for shared services – As announced at Autumn Statement 2014, the government will legislate to enable named non-departmental and similar bodies to claim a refund of the VAT they incur as part of a shared service arrangement used to support their non-business activities, to encourage public bodies to share back-office services, where this results in efficiencies of scale. (Finance Bill 2016)

2.153 VAT: Isle of Man charities – The government will legislate to ensure charities subject to the jurisdiction of the High Court of the Isle of Man are capable of qualifying for UK VAT charity reliefs. (Finance Bill 2016)

2.252 Investing in culture and sport – The government will support culture and sport, including by providing:

  • £1m to support S1 Artspace to create an arts complex in Sheffield, subject to planning permission being granted (67)
  • £5m to support Shakespeare North, a new theatre in Knowsley, subject to business case and planning permission being granted (67)
  • £5m to support the refurbishment of Hull New Theatre and £8 million to create a lasting cultural legacy in Hull (67)
  • £1m to support the transformation of Drapers’ Hall into a multi-purpose music venue in Coventry (67)
  • £620,000 to support Being Brunel, the National Brunel Project in Bristol
  • £2m to support the refurbishment of the Hall for Cornwall, subject to planning permission being granted (67)
  • £500,000 towards a marketing campaign to promote the Tour de Yorkshire 2016 to overseas visitors (67)

2.253 Great Exhibition of the North – Building on the announcement of £20m funding at the Autumn Statement and Spending Review 2015, the government is inviting bids from northern cities and towns to host the Great Exhibition of the North.

2.254 First World War Centenary cathedral repairs fund and English Churches and Cathedrals Sustainability Review – The government will provide £20m across 2016/17 and 2017/18 to extend the First World War Centenary cathedral repairs fund. A review into sustaining England’s churches and cathedrals will be set up to assess maintenance and repair pressures and examine how the sector can become more financially sustainable.

2.255 The British Library: St Pancras redevelopment – The government supports the British Library’s ambition to develop land to the north of its St Pancras site, subject to a full business case.

2.259 Dundee V&A – The government will contribute £5m to the museum’s fundraising campaign. (67)

2.260 Lloyd George Museum – The government confirms £27,000 of funding per year from 2017/18 to 2019/20 towards the Lloyd George Museum in north Wales.

2.302 Homelessness – To support vulnerable rough sleepers off the streets and to help those who are recovering from homelessness, the government will:

  • invest £100m to deliver low-cost ‘second stage’ accommodation places for rough sleepers leaving hostel accommodation and domestic abuse victims and their families moving on from refuges
  • invest £10m over two years in initiatives to support and scale-up innovative ways to prevent and reduce rough sleeping, particularly in London, building on the success of the No Second Night Out initiative
  • double funding for the Rough Sleeping Social Impact Bond announced at the Spending Review, from £5m to £10m, to drive innovative ways of tackling entrenched rough sleeping, including through ‘Housing First’ approaches