George Osborne announces extra funding for domestic violence refuges and armed forces charities in summer Budget

The Chancellor of the Exchequer also unveils measures on the national minimum wage and inheritance tax

George Osborne
George Osborne

Extra funding for domestic violence refuges and armed forces charities and changes to the national minimum wage and inheritance tax are among the measures likely to affect charities announced in today’s summer Budget.

Speaking in the House of Commons, George Osborne, the Chancellor of the Exchequer, announced £70m of new funding for military charities and other good causes from fines levied on banks.

Documents released alongside Osborne’s speech said the government would set up a new £3m fund to "encourage innovative approaches including refuge provision to help those suffering from domestic abuse".

Osborne announced changes to the minimum wage, which is currently £6.50 an hour for people aged 21 and over.

It will become the "national living wage" from April 2016 and be set at £7.20 an hour, before rising to at least £9 an hour by 2020, said Osborne.

The increase could "seriously squeeze the budgets of those providing services to the most vulnerable in our society", according to Caron Bradshaw, chief executive of the Charity Finance Group.

The government said it recognised that the new minimum wage might increase costs for some organisations, so it was therefore increasing the national insurance contributions employment allowance – the amount that can be claimed from an organisation’s NI bill – from £2,000 to £3,000 a year from April 2016.

"This will help all businesses and charities, particularly smaller ones, with additional wage costs," the main Budget document says.

Charities were assessing what the changes to inheritance tax might mean for charitable legacies.

Osborne announced that an additional £175,000 allowance would be added to the existing £325,000 inheritance tax threshold for people who leave their homes to their children or grandchildren.

This would mean, he said, that families could pass up to £1m on to their children free of inheritance tax.

Osborne announced that the personal allowance before people start paying income tax would increase from £10,600 this year to £11,000 in 2016/17. This means fewer people will pay tax and will be not therefore eligible to claim Gift Aid on their charitable donations.

He reiterated the government’s intention to extend the right to buy to tenants of housing associations, which the umbrella body the National Housing Federation warned earlier this year would require a "fundamental rewriting of the agreement between government and civil society".

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