An additional £100m for military charities from banking fines, changes to investment limits on social investment tax relief and an invitation for women’s charities to apply for funds from the next round of tampon tax funding were among the announcements affecting charities in today’s Autumn Statement.
But the National Council for Voluntary Organisations said the relative stability on the main tax issues facing charities was welcome.
In his speech in the House of Commons this afternoon, Philip Hammond, the Chancellor of the Exchequer, told MPs the government would be giving a further £102m to predominantly military and emergency services charities from the fines paid by banks as a result of the Libor-rigging scandal.
The government has announced the awarding of grants to good causes from Libor fines regularly in both the Autumn Statement and the Budget since 2013.
Documents released by the Treasury today show that the amount announced today includes £5m for the Army Museums Ogilby Trust to support 139 individual military museums, £2.1m for Combat Stress to care for veterans with the most complex cases of post-traumatic stress disorder and £2m for the Royal Air Force Benevolent Fund to contribute towards building a respite facility for RAF veterans in the midlands.
The Chancellor also announced that Comic Relief had been chosen to distribute among women’s charities the first £3m of funding from the so-called tampon tax.
Women’s sanitary products are currently taxed as luxury items, which cannot be changed under EU law. In last year’s Autumn Statement, the government announced it would create a £15m fund, equivalent to the estimated amount the tax raises, for women’s charities.
Last month, the government announced that it was seeking an experienced grant-maker to manage the fund. The invitation to tender said the successful applicant would be able to offer match funding, deliver the programme and commit the full amount by the end of the year.
A spokeswoman for Comic Relief said information on how to apply for the funding would be available on the charity’s website when further details had been confirmed, but could not say when this would be.
The statement said charities that run programmes to tackle violence against women and girls would be able to apply directly for the 2017/18 round of funding, worth an estimated £15m, from 1 December.
A Treasury spokeswoman said charities dealing with deprivation affecting women and girls would also be eligible to apply.
The amount that social enterprises less than seven years old can claim through social investment tax relief will increase from more than £250,000 to a lifetime total of £1.5m.
SITR allows investors who put money into regulated social organisations, including charities, to claim back part of their investment against their tax bills.
The Autumn Statement says that SITR will be reviewed within two years of its enlargement, and the increase in SITR will apply from 6 April.
Simon Rowell, senior director strategy and market development at Big Society Capital, welcomed the announcement. But he added: "While some helpful improvements have been made, SITR still needs to be put on a level playing field with other private tax relief schemes, such as the enterprise investment scheme and venture capital trusts."
Peter Holbrook, chief executive of Social Enterprise UK, also welcomed the SITR increase, which he said "ought to make it easier for people to invest in social enterprises and help drive investment towards socially productive industries".
The statement reiterated the announcements made in the Budget earlier this year that the government would give intermediaries, such as online giving platforms, a bigger role in administering Gift Aid.
Estimates released by the Treasury today show that this will bring in an extra £10m a year in Gift Aid revenue for the sector in 2018/19, rising to an additional £20m a year in 2021/22.
Other measures announced in today’s statement that are likely to affect charities include: the increase in the minimum wage for workers aged 25 and over from £7.20 an hour to £7.50 an hour from April; an increase on the tax paid by insurance companies; and an increase in the amount people must earn before they pay tax, which means slightly fewer donors will be eligible to claim Gift Aid on their charitable donations.
The Charity Tax Group warned the insurance changes could result in some charities facing increases of thousands of pounds in their insurance premiums.
Voluntary sector reaction
Caron Bradshaw, chief executive of the Charity Finance Group, said: "This Autumn Statement must mark the end of the mantra that ‘there is no money left’ and that charities should be happy with their lot.
"We have seen tens of billions promised in infrastructure spending, business rate cuts and personal tax cuts. Most of this has been financed by greater levels of borrowing. There isn’t a lack of money; there is simply a lack of political will to support the valuable work of our sector.
"There are some helpful policies in the form of the freeze in fuel duty as well as more Libor giveways. But it is clear that we are not high enough up the new government’s agenda."
Asheem Singh, interim chief executive of Acevo, said the additional investment from Libor fines was welcome but the government had ignored its own post-Kids Company guidelines on good grant-making.
"Good causes are being served badly and there is a real question about whether this annual giveaway to various pet projects really is in the public’s best interest," he said. "Had the government chosen to deploy this money towards investment in the quality and support of charity governance, it would have demonstrated that it has learned the lessons of Kids Company, lessons that cannot be ignored if the needs of the nation’s most vulnerable are to be met.
"This was a sticking-plaster Autumn Statement. The economic forecasts cast a prolonged gloom over our economy and society and there was no sense of a vision to bring the public services on which we depend out of the other side."
Karl Wilding, director of policy and volunteering at the NCVO, said the sector needed to be ready for "tough times ahead".
He said: "The main message from today is the difficult and uncertain financial outlook. We were relying on strong growth for continued recovery in the economy, but Brexit means lower growth forecasts and great uncertainty.
"In this context, relative stability on the nuts and bolts of tax affecting charities is welcome. But the overall financial picture looks challenging."
Neil Cleeveley, chief executive of the local infrastructure body Navca, said the Chancellor had "acted in a disappointingly traditional manner".
He said he would like Hammond to recognise the "many ways in which charities support people to improve their own lives rather than seeing charities’ relationship with the state being defined in terms of public service delivery".