The Chancellor’s Autumn Statement 2016

In contrast to the seismic political events that 2016 will forever be remembered for, Philip Hammond’s first Autumn Statement was something of a sedate affair, and probably none the worse for that.

Most of the key measures, such as the investment in infrastructure and the abandoning of the aim to reach a fiscal surplus by the end of this Parliament, had been trailed in advance. While the ‘Northern Powerhouse’ was joined by the ‘Midlands Engine’, there was little relating to charities and certainly nothing about reducing the burden of VAT or tackling the apprenticeship levy, key concerns expressed in advance within the sector, while the LIBOR fines money continues to go to a small number of charities selected by the government.

Tax Rates, thresholds and allowances

Personal allowance and higher rate threshold
The government will meet its commitment to raise the income tax personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of this Parliament. As previously announced, next year, the personal allowance will rise to £11,500 and the higher rate threshold to £45,000 (para 45).

Corporation tax
The rate of corporation tax will be cut to 17% by 2020 and business rates reduced by £6.7 billion over the next 5 years (para 4.23).

National Living Wage and National Minimum Wage rates
As employers, charities may be affected by the increase in the National Living Wage by 4.2% from £7.20 to £7.50 from April 2017, and other increases in the National Minimum Wage (para 3.46).

Gift Aid

Gift Aid digital
As announced at Budget 2016, intermediaries will be given a greater role in administering Gift Aid, simplifying the Gift Aid process for donors making digital donations (para 4.17).

Gift Aid Small Donations Scheme
Following the review announced at Autumn Statement 2015, the Gift Aid Small Donations Scheme is being amended to make it more accessible and flexible, and to ensure fairer treatment between charities that are structured in different ways (para 5.18).

Readers may care to read the responses to the Government’s consultation on this topic at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/544955/Gift_Aid_Small_ Donations_Scheme-summary_of_responses.pdf

Women’s Charities

£3 million is being awarded from the so-called Tampon Tax to Comic Relief to distribute to a range of women’s charities.

Women’s charities should also note that applications are invited from 1 December 2016 for the next round of Tampon Tax funding to support women’s charities, including those running programmes that tackle violence against women and girls (para 5.15).

Museums and galleries tax relief

The scope of the museums and galleries tax relief announced at Budget 2016 will be broadened to include permanent exhibitions so that it is accessible to a wider range of institutions across the country. The rates of relief will be set at 25% for touring exhibitions and 20% for non-touring exhibitions and the relief will be capped at £500,000 of qualifying expenditure per exhibition. The relief will take effect from 1 April 2017, with a sunset clause which means the relief will expire in April 2022 if not renewed. In 2020, the government will review the tax relief and set out plans beyond 2022 (para 4.30).

Armed Forces and Emergency Services charities

A further £102 million of banking fines has been committed over the next 4 years to support Armed Forces and Emergency Services charities and other related good causes (para 5.14).

Investing in culture and sport

Funding will be provided for urgent repairs at Wentworth Woodhouse (a Grade I listed country house), a new creative media centre in Plymouth, a new arts complex in Southampton, and a Royal Society of the Arts pilot to promote cultural education in schools (para 5.20).

Commitments were also confirmed to hosting the 2021 Rugby League World Cup and the Cycling Road World Championships in 2019 (para 5.21).

Social Investment Tax Relief (SITR)

From 6 April 2017, the amount of investment social enterprises aged up to 7 years old can raise through SITR will increase to £1.5 million. Other changes will be made to ensure that the scheme is well targeted. The limit on full-time equivalent employees will be reduced to 250. The government will undertake a review of SITR within two years of its enlargement (para 4.34).

The paragraph references above relate to the full Autumn Statement 2016, which can be read at
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/571559/autumn_ statement_2016_web.pdf

Please note: This bulletin is published as a general guide to the 2016 Autumn Statement and not intended to replace specific professional advice from, for example, a solicitor or accountant. You should always refer to the official websites shown above for further information. Craigmyle consultants take no responsibility for the correctness or completeness of information or interpretation given here.

In contrast to the seismic political events that 2016 will forever be remembered for, Philip Hammond’s first Autumn Statement was something of a sedate affair, and probably none the worse for that.

Most of the key measures, such as the investment in infrastructure and the abandoning of the aim to reach a fiscal surplus by the end of this Parliament, had been trailed in advance. While the ‘Northern Powerhouse’ was joined by the ‘Midlands Engine’, there was little relating to charities and certainly nothing about reducing the burden of VAT or tackling the apprenticeship levy, key concerns expressed in advance within the sector, while the LIBOR fines money continues to go to a small number of charities selected by the government.

Tax Rates, thresholds and allowances

Personal allowance and higher rate threshold
The government will meet its commitment to raise the income tax personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of this Parliament. As previously announced, next year, the personal allowance will rise to £11,500 and the higher rate threshold to £45,000 (para 45).

Corporation tax
The rate of corporation tax will be cut to 17% by 2020 and business rates reduced by £6.7 billion over the next 5 years (para 4.23).

National Living Wage and National Minimum Wage rates
As employers, charities may be affected by the increase in the National Living Wage by 4.2% from £7.20 to £7.50 from April 2017, and other increases in the National Minimum Wage (para 3.46).

Gift Aid

Gift Aid digital
As announced at Budget 2016, intermediaries will be given a greater role in administering Gift Aid, simplifying the Gift Aid process for donors making digital donations (para 4.17).

Gift Aid Small Donations Scheme
Following the review announced at Autumn Statement 2015, the Gift Aid Small Donations Scheme is being amended to make it more accessible and flexible, and to ensure fairer treatment between charities that are structured in different ways (para 5.18).

Readers may care to read the responses to the Government’s consultation on this topic at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/544955/Gift_Aid_Small_ Donations_Scheme-summary_of_responses.pdf

Women’s Charities

£3 million is being awarded from the so-called Tampon Tax to Comic Relief to distribute to a range of women’s charities.

Women’s charities should also note that applications are invited from 1 December 2016 for the next round of Tampon Tax funding to support women’s charities, including those running programmes that tackle violence against women and girls (para 5.15).

Museums and galleries tax relief

The scope of the museums and galleries tax relief announced at Budget 2016 will be broadened to include permanent exhibitions so that it is accessible to a wider range of institutions across the country. The rates of relief will be set at 25% for touring exhibitions and 20% for non-touring exhibitions and the relief will be capped at £500,000 of qualifying expenditure per exhibition. The relief will take effect from 1 April 2017, with a sunset clause which means the relief will expire in April 2022 if not renewed. In 2020, the government will review the tax relief and set out plans beyond 2022 (para 4.30).

Armed Forces and Emergency Services charities

A further £102 million of banking fines has been committed over the next 4 years to support Armed Forces and Emergency Services charities and other related good causes (para 5.14).

Investing in culture and sport

Funding will be provided for urgent repairs at Wentworth Woodhouse (a Grade I listed country house), a new creative media centre in Plymouth, a new arts complex in Southampton, and a Royal Society of the Arts pilot to promote cultural education in schools (para 5.20).

Commitments were also confirmed to hosting the 2021 Rugby League World Cup and the Cycling Road World Championships in 2019 (para 5.21).

Social Investment Tax Relief (SITR)

From 6 April 2017, the amount of investment social enterprises aged up to 7 years old can raise through SITR will increase to £1.5 million. Other changes will be made to ensure that the scheme is well targeted. The limit on full-time equivalent employees will be reduced to 250. The government will undertake a review of SITR within two years of its enlargement (para 4.34).

The paragraph references above relate to the full Autumn Statement 2016, which can be read at
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/571559/autumn_ statement_2016_web.pdf

Please note: This bulletin is published as a general guide to the 2016 Autumn Statement and not intended to replace specific professional advice from, for example, a solicitor or accountant. You should always refer to the official websites shown above for further information. Craigmyle consultants take no responsibility for the correctness or completeness of information or interpretation given here.