25 Nov 2016 12:32 PM

Although the Chancellor Philip Hammond presented a bleak economic forecast in his first Autumn Statement, and was clearly focusing on infrastructure and transport, he also announced changes to the Not For Profit sector that are interesting. These included changes to social investment tax relief (SITR); changes to gift aid; more money for military charities from fines on banks and another round of 'tampon tax' funding.

Read Alliotts Summary of the 2016 Autumn Statement

Social Investment Tax Relief
SITR allows investors who put money into regulated social organisations, including charities, to claim back part of their investment against their tax bills; currently the maximum amount that can be invested into a SITR scheme is £293,000 over three years. The Autumn Statement sets out plans to increase this to £1.5million, where a SITR scheme has been running for less than 7 years, from 6 April 2017.

Gift Aid
The Chancellor plans to make changes for charities by giving digital intermediaries greater abilities to help them claim gift aid and by updating the Gift Aid Small Donations Scheme (GADS).

The GADS scheme allows charities to claim gift aid on small cash donations and was increased from £6k to £8K in April this year. GADS can be claimed even if there is no paperwork to support the claim.

Charities also need to be aware of the other announcements Hammond made that may impact them:

  • The increase in the personal tax threshold to £11,500 in April 2017 may result in fewer people above the limit being eligible to claim gift aid and it is the donor’s responsibility to cover any gift aid shortfall.
  • The increase in the minimum wage from £7.20 an hour to £7.50 an hour for employees aged 25 and above from April 2017 may impact upon a charity’s budget.

‘Tampon Tax’
The Chancellor referred to the allocation of funds raised from the ‘Tampon Tax’. Women’s sanitary products are taxed as luxury items; in the 2015 Autumn Statement the government created a £15m fund, (equivalent to the estimated amount the tax raised), to fund charities supporting women. Yesterday the Chancellor announced that a final allocation of £3m from the ‘Tampon Tax’ would be made and that Comic Relief have been appointed to distribute these funds.

Money for military charities
£102m arising from LIBOR banking fines will be allocated to military charities.  Information from The Treasury shows that this includes:

  • £5m for the Army Museums Ogilby Trust to support 139 individual military museums,
  • £2.1m for Combat Stress to care for veterans with complex cases of post-traumatic stress disorder,
  • £2m for the Royal Air Force Benevolent Fund for the building of a respite facility for RAF veterans.

John Low, chief executive of the Charities Aid Foundation, said,

‘We know that during uncertain times charities are increasingly relied upon to support those in most need,’

he added,

‘In recent years charities have experienced rising demand for their services while resources have been increasingly stretched. Charities have a big role to play in building a better society and a fairer economy and it will be vital that government embraces their expertise and influence in shaping some of the new policies announced today.’

If you need any advice on Social Investment tax Relief, claiming Gift Aid or anything else mentioned above, please contact me.

Read Alliotts Summary of the 2016 Autumn Statement