How will the Autumn 2021 Budget and Spending Review impact charities?

There were not many charity-specific announcements in the Autumn Budget and Spending Review last week, but some charities will benefit from some of the sector specific announcements, and the extension / continuation of particular tax reliefs.

Some good news for museums, cultural and sporting bodies, and youth services

Sector announcements included:

  • £52 million in new funding for museums, and cultural and sporting bodies next year to support recovery from the pandemic, and a further £49 million in 2024/25 to allow them to “thrive” and
  • £560 million for youth services in England, including funding the government’s commitment to a Youth Investment Fund which will deliver up to 300 youth facilities in areas most in need.

In addition, it was announced that the Museums and Galleries Exhibition Tax Relief will be extended for a further two years until 31 March 2024, and the headline rates of tax relief for that relief, as well as those for Theatre Tax Relief and Orchestra Tax Relief, will be increased.

Business Rates

In terms of other announcements on tax, many charities may benefit from the Government’s statements about business rates, which included:

  • a new temporary business rates relief for eligible retail, hospitality and leisure properties for 2022-23, and
  • a new business rates relief to support investment in property improvements from 2023.

There was also confirmation that the Government does not intend to remove the charitable rate relief for business rates “at this time”. The mandatory rates relief for charities is worth around £2 billion to the sector each year, so this is a significant benefit.

However, the Government’s additional stated commitment to keep the full range to reliefs “under review to ensure they remain fit for purpose” suggests that the campaign by the sector in response to the business rates review earlier this year to retain this relief may well periodically need to be revived.

UK Shared Prosperity Fund

There was also the announcement of the intended value of the UK Shared Prosperity Fund, with £2.6 billion of spend allocated between now and 2024/25.

It therefore remains to be seen whether this fund will provide a level of funding similar to that received by the UK through the EU structural funds – which amounted to £7.7 billion between 2014 and 2020.

And it is worth noting that around £550 million of the amount initially allocated to the Shared Prosperity Fund is already earmarked for a UK-wide adult numeracy program.

Charity Commission funding

Finally, there was good news for the Charity Commission, with the announcement of a significant increase in its funding from Government, to £29.8 million planned by 2022/23.

Recently, the idea that the Charity Commission may start charging charities to provide it with the funding it needs to operate its services has come up fairly regularly, but this planned increase may suggest that the prospect is off the table for the time being.

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