A mixed Budget bag for sector

George Osborne
George Osborne

Extra funding for domestic violence refuges and armed forces charities, and changes to the national minimum wage and inheritance tax, were among the measures announced in the 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 with 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".

From 2017, said Osborne, the government would phase in an additional allowance to the existing £325,000 inheritance tax threshold for people who leave their homes to their children or grandchildren.

The additional allowance will be £100,000 in 2017/18, rising by £25,000 a year until it reaches £175,000 by 2020/21.

Osborne said the changes would mean that families could pass up to £1m to their children free of inheritance tax.

Alex McDowell, chair of the membership body Remember A Charity, which encourages people to leave gifts to charity in their wills, warned that the measure could have a negative effect on charity legacy income. "One of the biggest challenges is that professional advisers will not find it as relevant to discuss legacies with so many clients, and their role has been instrumental in increasing the number of people that include charities in their wills," he said.

But Meg Abdy, director of the charity legacy consortium Legacy Foresight, said she did not believe the changes would be a significant threat to legacy income.

"The general evidence is that people are leaving charitable legacies for genuine philanthropic reasons rather than to avoid the taxman," she said.

Osborne also 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 will be set at £7.20 an hour, before rising to at least £9 an hour by 2020, he said.

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

Osborne 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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