Spring Budget: considerations for the Not for Profit sector

As the National Council for Voluntary Organisations (NCVO) reported, the Spring Budget, released on 6 March, was likely the Government’s final opportunity to set out spending plans before the next general election. They also noted that whilst the Budget could have also been a key moment to bolster and empower the voluntary sector, the Government have yet again missed this opportunity. This sentiment has been echoed across sector bodies and sector media outlets.

The Charity Tax Group (CTG) have summarised the areas of the budget most relevant to the sector:

• The VAT registration threshold for small businesses will increase to £90,000 from 1 April 2024.
• The Government will cut the main rate of National Insurance Contributions for employees from 10% to 8%. The main rate of national insurance for the self-employed will reduce from 8% to 6% on Class 4 National Insurance Contributions.
• Amendments have been tabled to the Digital Markets, Competition and Consumers Bill to allow charities to continue to claim Gift Aid on subscription contracts, which could otherwise have been affected by the provisions in the Bill.
• Theatres, orchestras, museums and galleries will be given permanent higher rates of tax relief from 1 April 2025. These will be 40% for theatres, museums, and galleries, and 45% for all orchestra productions and other touring productions.
• £45 million will be provided to medical charities with life-saving research agendas.
• £5 million will be added to the Platinum Jubilee Village Halls Fund for local village halls across England.

CTG Chair, Richard Bray, welcomed the increase in the VAT registration threshold and the increase in relief for museums and galleries, but noted that there were, overall, very few measures to help the charity sector.

The Charity Finance Group have produced a Spring budget analysis ‘policy briefing’ document which also welcomes certain announcements in the Budget but also notes that a lot of critical issues for the sector remain unaddressed, including how the Government will put local authorities on a sustainable financial footing.