Budget winners and losers

The 2012 Budget has confirmed that the Government will introduce a new Gift Aid small donations scheme in April 2013, enabling arts charities to claim a top-up payment on small donations of up to £20 without the need to collect Gift Aid declarations. Charities will be able to claim Gift Aid on donations totalling £5,000 a year or less. But these small-scale gains could be more than offset by another Budget measure to introduce a £50,000 cap on income tax reliefs, which could have an impact on large philanthropic donations. From next year, anyone seeking to claim tax relief under Gift Aid will face a cap set at 25% of their income, or £50,000, whichever is greater. A coalition of major charities, led by the Charities Aid Foundation and the National Council for Voluntary Organisations, are signing up to the ‘Give it Back George’ campaign to draw attention to the potential consequences of the tax relief cap.

Some charities that occupy listed buildings may have been hit hard by the Budget: voluntary organisations planning to make improvements to them will find they now have to pay VAT on the work, meaning that if the improvements did not begin before Budget day, the work will now cost 20% more than it would have previously. And those planning to respond to Arts Council England’s recent policy pledge to embed environmental sustainability into the funding agreements of its major programmes will also be caught for extra VAT: charitable buildings have been withdrawn from the scope of the VAT reduced rate for the supply and installation of energy-saving materials.

Other measures could have a more positive impact. Sector-based reviews of red tape will be taking place to ensure regulation is enforced at the lowest possible cost, starting with volunteer events. Changes to health and safety regulation will lead to 84% of current rules being scrapped, and employers will no longer be held liable for accidents when they have done everything reasonably practicable and foreseeable to protect their employees.