A brief round-up of items of specific relevance to voluntary organisations - more may emerge from the depths. Paragraph references and excerpts are from the Full Report, available in chapters at the HM Treasury’s Budget pages, http://www.hm-treasury.gov.uk/budget/budget_07/bud_bud07_index.cfm. Detailed HM Revenue and Customs information at http://www.hmrc.gov.uk/budget2007/notes.htm.
UPDATE 29/3/07:
– Office of Third Sector summary of relevant Budget measures.
– NCVO’s round-up of main points at http://www.ncvo-vol.org.uk/policy/index.asp?id=4498.
– From Budget Report paragraph 6.82 in relation to community access for extended schools: “the Government will remove VAT constraints for current academies and all those planned for the future”.
Funding
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– For community groups: (paragraph 5.76): “This Budget announces additional support to promote community action and voice with £80 million to be made available to provide core funding to grass-roots community organisations. The funding will be run by the Office of the Third Sector, and channelled through third sector partners at a local level (such as Community Foundations)” and distributed over four years. Details on criteria etc. to follow.
– Capacity building investment through the Futurebuilders fund (paragraph 5.79) “will be open to all third sector organisations from spring 2008″. It is currently restricted to those providing public services in five key areas.
Supporting Giving
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(Paragraph 5.84)
– The Government will consult with the charitable sector on measures to increase take-up of gift aid and conduct an awareness-raising campaign. The Government will also work with the sector on payroll giving, and publish guidance on tax efficient giving for individuals.
– An increase in the value of benefits that donors may receive, in consequence of a donation made within the gift aid regime, to 5 per cent of the donation for those donating £1,000 or more, with the upper limit on benefits received increased to £500. HM Revenue and Customs Notes, in pdf 48kb, http://www.hmrc.gov.uk/budget2007/bn43.pdf.
– The cut in basic rate tax from April 2008 will reduce the amount reclaimable via Gift Aid. Charities Aid Foundation reaction at http://www.cafonline.org/Default.aspx?page=12759.
Community finance
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(Paragraphs 3.23, 3.83)
– To ensure sustainability of the Community Development Finance model, “the Government will liaise with the banking sector, including the European Investment Bank and Community Development Finance Institutions, to explore how the framework could be developed further”.
– Community Investment Tax Relief ‘onward investment requirement’ is changed from 75 per cent at all times to an average of 75 per cent over the course of the year. Also the Office of the Third Sector will look at the low level of equity investment in social enterprises and whether the CITR model might be enhanced to encourage this form of investment (paragraph 5.81).
Other
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– In connection with modernising empty property relief for business rates (paragraph 3.140) “complete exemptions from rates will be awarded to empty properties held by charities”.
– Secondments to charities and educational institutions - tax relief for businesses. HM Revenue and Customs Notes, in pdf 42kb, http://www.hmrc.gov.uk/budget2007/bn45.pdf.
– Charities that have obtained zero-rating for their new buildings or construction services under Extra Statutory Concession 3.29 will no longer be liable for any VAT charge when there is a ‘change of use’ of the building within ten years of the zero rate having been obtained. HM Revenue and Customs Supplementary Document, pdf 31kb, http://www.hmrc.gov.uk/budget2007/vat-charities.pdf.
Connected reports
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– The Futurebuilders Advisory Panel published their first progress report on this capacity building fund for voluntary organisations delivering public services. The Panel is quoted as welcomed its work as “highly innovative” and “ahead of its time”. The report also says “Despite a slower start than originally anticipated, there have so far been 193 investment offers totalling £84 million. It is too early to assess impact on service delivery as the majority of the money is funding loans for capital investment projects that will, as expected, take some time to set up; but the early signs are encouraging.” News release with link to report.
– The final report from Sir Michael Lyons’ independent Inquiry into the future role, function and funding of local government, ‘Place-shaping: a shared ambition for the future of local government’ was published. Not directly relevant to most organisations all but of interest to many - its not just about council tax! http://www.lyonsinquiry.org.uk/index.php?leftbar=home&text=PN070321.