Budget comment - The Charitable sector

9th March 2017 by Helen Rumsey

The Chancellor’s Budget included very few specific references to the charity and not for profit sector. Was that good or bad for the sector? Well clearly, specific positive initiatives that would have made the position of charities either financially or administratively easier would have been the ideal. But equally, there is still something to be said for the status quo when the alternative could have been to make things worse.

So, whilst there were no moves to reduce the burden of VAT by extending VAT recovery for the not for profit sector, or to grant 100% mandatory business rates relief for charities, what was in the Budget for the charitable sector?

Firstly, one of the headline provisions was the Chancellor’s announcement that there would be an additional £2bn of funding for adult social care spread over the next three years. Whilst this funding is not specifically directed towards charities, historically a proportion of adult social care has been delivered by charitable organisations, so perhaps it isn’t unreasonable to expect at least some of that money to filter its way into the hands of charities. That said, many of these organisations have already suffered significant cuts in funding over recent years and are also having to bear the cost of the national living wage. But any additional funding must be helpful, especially against a backdrop of increased demand.

On a smaller scale, the Chancellor has promised a further £20m to help combat domestic violence and abuse over the life of this Parliament. Again this is only relevant to certain charities, but nonetheless welcome. And another £12m of funding from the ‘tampon tax’ will be made available to women’s charities more widely.

More generally, whilst there was unfortunately no move to grant charities mandatory 100% business rates relief, the sector should not be excluded from the ability to benefit from the £300m of discretionary business rate relief which is being granted to Local Authorities.


Helen Rumsey

Helen Rumsey

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