In a Budget that focused heavily on spending plans, we take a look at how some of the announcements will impact the third sector.
Creative industries tax relief
This tax relief can provide cashback to theatres, orchestras, museums, and galleries that stage certain types of performances and exhibitions. The rates of tax relief available to these organisations will now be increased from 27 October 2021 to 31 March 2024, with the rates tapering down from April 2023.
As many of these organisations were forced to cancel their shows and exhibitions due to the pandemic, no doubt this increased tax relief will be a very welcome boost to cash flow.
The increased rates of relief are:
A new temporary business rates relief of 50% will be available in England for the retail, hospitality and leisure industry. The final report of the Business Rates Review also confirms that the government do not intend to remove any of the existing business rates reliefs.
In addition to the above, the Chancellor announced that the business rates multiplier would be frozen until April 2023.
National living wage
The national living wage will increase to £9.50 per hour from April 2022. This will be an additional cost for charities who pay the living wage, and will need to be factored into budgets and bid proposals.
Conversely, this increase may reduce the number of people needing help from the charity sector.
Other announcements which will affect the sector include:
- Cutting the universal credit taper from 63% to 55%. This will allow universal credit claimants to keep an additional 8p for every £1 of net income they earn
- £560m will be given in funding for youth services in England over the next 3 years, enough to fund 300 youth clubs
- £850m will be given to protect museums, galleries, libraries and local culture. Over 100 regional museums and libraries will be renovated, restored, and revived
- £640m to be spent combatting rough sleeping and homelessness
- £1.7bn to be invested in local growth and infrastructure as part of the Levelling Up Fund. This level of investment will improve standards of living for people across the UK and will help ensure that people’s opportunities in life are not determined by where they live.
Charities will welcome the spending commitments made in the Budget and will be pleased to see that the government has listened to the sector by acknowledging the need to increase local government funding.
If you have any queries or would like to discuss this further, please contact a member of the team: