Live Blog: Spring Budget 2017

March 7, 2017 at 12:13

Welcome to Charity Finance Group’s Spring Budget Live Blog.

Here the CFG policy team will keep you abreast of the all the developments in the lead up to the Budget and will provide live updates and early analysis during the Chancellor’s speech which begins at 12.30pm on Wednesday 8 March.

Follow #VolSecBudget On Twitter, as well as the CFG policy team – @CFG_obrien, @anjelicaseason @CFG_McLoughlin @CFGtweets – for all the latest analysis.

Members of the Policy team Anjelica (ASF), Andrew (AOB) and Heather (HML) will be posting updates. The most recent updates will be posted at the top of this page.

In this blog you will find:

Expert analysis

17:58 – Pesh Framjee, Partner and Head of Non Profits at Crowe Clark Whitehall LLP

Whilst there are some benefits to charities and CFG’s lobbying has got some cut through it seems that this is an opportunity lost.

The extra funding for social care is much needed – especially as the Local Government Association estimates that there will be a £2.9bn annual funding gap in social care by the end of the decade and the introduction of the National Living Wage will add another £1bn to the costs of care homes between now and 2020.

Whilst this Budget was low on announcements, charities must remember that measures announced in the 2016 Autumn Statement will have effect from April 2017.

In particular, changes to the Gift Aid Small Donations Scheme GASDS.

This scheme is designed to give a top up equivalent to Gift Aid on small cash donations up to £20 each.  Cash in this context means coins and notes.  There is an overall annual limit for claims on £8,000 of donations per charity (meaning a maximum refund of 20/80 of this amount, or £2,000).  There is another limit of £8,000 for charities receiving donations while carrying out charitable activities in community buildings.  The limit is £8,000 per community building.

From 6 April 2017 the following changes will apply:

  • Cash will also include contactless payments of up to £20
  • Charities will be able to claim under either the overall limit or the community buildings limit, but not both.  This means that charities with more than one community building will still be able to claim for donations under more than one limit of £8,000, but charities with only one community building will only be able to claim under one limit of £8,000.
  • Collections will no longer need to be carried out during the charitable activities in the community building, but can be carried out in the same local authority area.  This will allow churches, for instance, to get a top up on collections for carol singing outside local supermarkets or railway stations.
  • Removal of requirements for the charity to have existed for two full tax years before making a claim, and to have made gift aid claims in two out of the last four tax years. However, charities must still have not incurred a penalty for incorrect gift aid claims in the year of claim or the preceding year.

16:37 – Julie Hutchison, Charities Specialist at Standard Life Wealth

Air quality –For charities with a focus on the causes of, and health consequences of, air pollution, today’s announcement in this area is particularly relevant.  As well as a draft plan expected in the spring, to set out how the UK’s air quality goals will be met, the government is continuing to explore the “appropriate tax treatment for diesel vehicles.”   It has signalled this tax may change at Autumn Budget 2017.  Some health-focussed charities are already considering how to reflect these kinds of concerns in their investment portfolio or engagement strategy, where this is in line with their charitable purposes.

Inheritance tax update – The forecast announced for annual inheritance tax receipts has increased, up to £6.2bn in 2021/22.  This is double the level seen in 2012/13.   With many charities looking to diversify their sources of income, encouraging donors to consider leaving an inheritance tax-free legacy to a charity in their Will makes even more sense for donors who are keeping an eye on their inheritance tax bill.

16:28 – Sudhir Singh, Partner at MHA MacIntyre Hudson

As in recent budgets there are will be a few charities that will be pleased with the announcements, including social care providers, charities supporting women that are victims of domestic violence, and those that benefited from sector support in last autumn’s budget, in areas such as museums and galleries relief, revisions to Social Investment Tax Relief, and the Tampon Tax.  In relative terms this is all pretty small beer (where duty only rises by inflation).

More significant funds are going to be provided in the education sector, largely to support either the government’s industrial strategy or to bolster their plans for free schools and grammar schools.  As always one has to take care with the messaging that goes alongside these announcements.  The skills sector has been demanding greater support ever since last year’s Sainsbury Review, and some of the announcements such as increases in tuition hours only bring the country up to the level of most of our competitors.  Similarly the capital funding for schools is very small in the context of annual spending by the Department for Education, which already has a large budget for new free schools in this parliament.  Research has also shown that grammar schools are not the catalyst for social mobility they are claimed to be, so something was needed to appease the back benches.

The budget reiterated measures previously announced to tighten tax rules for the self-employed.  Of particular reliance to some charities defined as public bodies (essentially if subject to the Freedom of Information Act) are changes announced last year regarding definitions of self employment, including rules around IR35, which take effect from 6 April 2017, but the guidance for which was only finalised by HMRC last week.  We have written a blog on this subject here  and a review of the Spring Budget here.

15:50 –  Anna Bennett, Charities Partner, haysmacintyre

“Several measures to mitigate recent changes to business rates were announced, however it is a shame that these are primarily aimed at businesses and there was no specific mention of charities. Charities will be eligible to benefit from a £300m fund to provide additional discretionary business rate relief, however how much of this local authorities choose to allocate to charities remains to be seen.”

15:38 – Louise Veragoo, NFP Tax Director, haysmacintyre

“Following much speculation, a welcome boost to adult social care was announced, with £2bn of additional grant funding to be made available to local authorities over the next 3 years. Given that this is only a temporary measure, a green paper will also be released later this year, focusing on the longer term funding options in light of the ageing population.”

15:20 – Graham Batty, Associate Director of RSM UK Tax and Accounting Limited

“For someone nicknamed “Spreadsheet Phil” Mr Hammond delivered a relaxed and witty Budget speech. Not surprisingly, however, given that the Prime Minister is about to serve the divorce papers on the EU, uncertainty about which way the US economy will go two months into  the new Trump administration and the fact that he has a second go in the autumn there were no surprise or dramatic new announcements.

The only direct mention charities received was the £12 million to be allocated to women’s charities from the tampon tax. That is not to say that there is nothing in the Budget for charities. The two flagship spending areas were education and addressing the social care crisis .The announcement of £500 million a year of additional funding for 16 – 19 education and the new T levels represents a significant opportunity for colleges who will be the major providers. There is also £2 billion for social care over the next three years. While this money will be provided to local authorities much of the actual provision is likely to be contracted to care charities.”

15:15 –  Chris Riley, Head of Tax at PKF Littlejohn

“Raising the main rate of Class 4 National Insurance Contributions by two percent isn’t going to have as dramatic an impact as the lengthy build-up in the Chancellor’s speech.  However, as a policy that was announced as being fairer and ‘less regressive’ than the Class 2 NICs it purports to replace, it was perhaps a little overstated.

It takes only a back of the envelope calculation to reveal that the changes will affect those with lower profits more than those with greater income levels.

However, with self-employment becoming a viable option for an increasing number of individuals thanks to the rise of the gig economy, the Treasury may have decided that now was the right time to start banking higher receipts from this growing army of flexible workers. Seen in this way, this is a calculated move by the Chancellor that gives the Treasury some upside from a trend that shows no signs of waning.”

15:09 – Helen Eilliott, Partner at Sayer Vincent

“Increased probate fees will hit charities – Whilst this change was announced a week ago rather than as part of the budget, charities will be affected by probate fees increasing dramatically from May 2017. The current flat fee of £215 (or £155 if through a  solicitor) will be replaced by a sliding scale based on the value of the estate. The proposed fees start from £300 where the value of the estate is between £50,000 and £300,000 and go up to £20,000 where the value of the estate is over £2m. This will impact a large number of charities that receive residuary legacies as it will reduce the value of the legacy to the charity by the fee.

Many wills leave the residuary of the estate to charities so the massive hike in fees –in effect a tax on death – will reduce the amount charities receive by up to £20,000 a time on a large estate.

Social Care –The government has announced an additional £2 billion to local authorities over the next 3 years to spend on adult social care services. £1 billion of this will be provided in 2017-18 as additional funding to pay for care packages and to support social care providers. It remains to be seen how much of this money filters through to social care providers but on the face of it this announcement is very good news for the many charities and other social care providers currently struggling to make ends meet whilst still providing the services needed. It should also help relieve some of the pressures on NHS services.

This additional funding is very welcome – hopefully local authorities will ensure every last penny goes on social care so more people receive the services and support they need and, in some cases, have previously had cut.”

 14:54 – Katharine Arthur, Head of Tax, haysmacintyre

“It is disappointing that there were no announcements of any broad measures that could help the charitable sector as a whole, although some specific funding was announced for women’s charities and organisations combating domestic abuse. Increases to individual taxation (NICs and dividends) are unlikely to affect many charities directly, but will hopefully help reverse the trend of the charitable sector picking up the slack of stretched public services in the long term.”

 14:36 – Caron Bradshaw, Chief Executive of Charity Finance Group

“The government’s increasingly narrow focus on physical infrastructure and business means that the government is unwittingly ignoring a key part of our economy and society. As a charity sector we need to make sure that the important contribution that we make is understood by politicians and that in the rush to make Britain competitive in the post-Brexit world, we don’t forget the value of a stronger society.

There are options available for the government to support charities and their beneficiaries – whether that is through reducing the burden of irrecoverable VAT, cutting business rates or reforms to the Apprenticeships Levy. We must have the courage to keep putting the business case to government.

The silence wasn’t all negative. There are some positives for charities with no further increases in Insurance Premium Tax announced, which could have cost charities tens of millions of pounds. But overall, this Budget highlights that the big task that charities face in reintegrating ourselves into the heart of government.”

14:15 – James Pike, Head of Charities at Waverton Investment Management

“The Chancellor’s very last Spring Budget didn’t have much detail for the charity sector; but one thing is for certain, whilst funding might be muted, costs are increasing – the OBR’s predictions for higher than targeted inflation of 2.4% for 2017 and 2.3% for 2018 will add to the challenges of balancing the books for organisations already faced with lower income and the increased cost of regulation.”

Live updates

14:08 – ASF

UPDATE FROM HM TREASURY – the £300 million fund to provide discretionary business rate relief will be available to charities. But of course, charities will be competing with private businesses for these funds.

13:49 – ASF

You can watch initial reactions from our Head of Policy and Chief Executive on Facebook Live.

Key message: The Budget was a bit of a flat pancake for the charity sector. We need to be much bolder ahead of the next Budget – the Chancellor has shown that there is money where there is a political will and the charity sector needs to make it clear why we are essential to inclusive growth and ensuring we maintain a strong, dynamic and healthy democracy.

13:33 – ASF

So some initial thoughts – the Chancellor has shown that there is money available when they are put under pressure. For example, the business and retailers lobby has seen their lobbying pay off with the changes to Business Rates, and the (justified) outcry over the state of social care and the pressures on the NHS, has resulted in Mr Hammond committing significant funds.

However, I can’t help but think that the solutions to the challenges and threats that the Chancellor sees facing Britain do not marry up.

The message Mr Hammond has given loud and clear is that it is all about business competitiveness, and yet some of the biggest challenges that he talks about are social care, making sure local communities thrive and can take control of their local areas, developing skills and ensuring people can access work. Areas where the charity sector surely plays a pivotal role?

When we hear the Prime Minsiter talk about the Shared Society, and the Chancellor states that he wants to make an economy that support everyone. Surely we should see policies that improve the operating environment for charities so that they are able to commit as much of their income as possible to helping those people that the Government want to support?

13:35 – ASF

The Chancellor didn’t mention Insurance Premium Tax, this is good news but we still need to push for a charity exemption.  You can read more about that further down this blog.

13:28 – ASF

There will be a Green Paper on social care funding as Andrew thought there might be in his blog for the Third Sector.

It is vital that charities have their voices, and those of the people that they support and care for, are heard and shape this paper and the future direction of travel.

13:27 – ASF

So we have confirmation that social care and the NHS will get an injection of funding – it will be worth £2 billion over the next 3 years.

It will taper out by the end of the Parliament so a crunch will likely be felt by the end of the Parliament.

13:21 – ASF

The Chancellor has said that the “we languish near the bottom for international league tables for technical education”.

And now onto Apprenticeships:

2.4 million apprenticeship starts in the last Parliament and a further 3 million is predicted with the introduction of the levy. The IFS have put a question mark over whether this will happen.

So the Chancellor has confirmed the new T-levels which will allow young people to take technical route into work rather than the academic route. It is vital that charities as well as businesses and the public sector play a role in supporting the development of this vocational training.

13:17 – ASF

Education and Skills now.

I am keeping an ear out about apprenticeships and the apprenticeship levy.

13:16 – ASF

I didn’t update you on ‘returnships’ – apologies, readers!

So this is £5 million funding to help people back to employment after career break. This funding will only be available in the public and private sector, it seems. It’s important that charities are also supported in ensuring that people can return to work after a long leave of absence. I will be following this up.

13:12 – ASF

DEVOLUTION CLAXON

Local areas are going to “take control of their economic destiny”. Apparently the Chancellor and Mayor of London have agreed a devolution deal for London. This will be interesting to see – how will local community groups and charities be involved in making sure that communities’ voices are included in decision making?

13:08 – ASF

CONFIRMED:

£20 million to support women and girls has been announced. This is on top of an additional £12 million raised from the tampon tax. Again, why this government thinks that women need to fund their own protection is being me.

I hope that they make this funding available in line with the Grants for Good grant making principles.

13:05 – ASF

Confirmation that NLW will rise again to £7.50 in April. This we already knew.

The National Living Wage is a welcome policy but as I have written about extensively before this policy will cost the sector at least £500 million by 2020. This is without pension and NICs costs included in the calculation.

Charities delivering public services in particular will be put under pressure unless the value of contracts increases.

13:00 – ASF

So the Chancellor has stopped shy of raising National Insurance Contributions for self-employed people to the same as employees. Class 4 NICs will increase by 10% in April 2018 and a further 1% increase by 2019.

I want to go and see how many people work on a self-employed basis for charities? *makes notes for research into charity sector workforce*

12:58 – ASF

As I wrote yesterday, self-employed people will be asked to pay more in tax. As Andrew said in his tweet (below), it will be interesting to see how much this raises, and indeed where some of this will be spent.

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12:55 – ASF

The Chancellor says that he has listened to concerns raised by MPs and business about the effects of the Business rate revaluation.

Today the Chancellor is introducing 3 measures:

  1. Any business coming out of small business rate relief will not see bill increase by more than £50 a month, and subsequently increases will be capped.
  2. Local pubs will be given a £1000 discount for all pubs with rateable value of less than £100,000 – this will support 90% of pubs. If pubs are vital to local communities so are charities and community groups – CFG, along with our sector partners, have consistently called for a more equitable business rate system for charities.
  3. Local authorities will have a £300 million funds to provide discretionary relief to individual cases that need it most. So this presumably could go to charities, but will it?

I think this shows that charities need to be much bolder in calling for 100% business rate relief for charities. Where there is a political will there is a way, it seems. 

12:48 – ASF

The Chancellor is about to go on to his tax announcements now.

Mr Hammond says that we need a fair and stable tax system – yes, we agree and the charity tax system needs to be reformed to be both fair and stable. See CFG’s Charity Tax plan for details.

12:47 – ASF

Inflation will increase. It will hit 2.4% this year and will fall to 2.3% in 2018 and then again to 2% in 2019.

The Chancellor says that real wages will continue to rise in every year. We know that disposable income is linked with people’s propensity to donate, so it will be important for charities to keep an eye on these figures.

12:45 – ASF

OBR has upgraded it’s forecast from 1.4% for next year to 2%

Here is a summary of expected growth over the next Parliament.

2017: 2% (up from 1.4% previously forecast)
2018: 1.6% (down from 1.7%)
2019: 1.7% (down from 2.1%)
2020: 1.9% (down from 2.1%)
2021: 2% (same as 2021)

12:39 – ASF

Debt is still too high says the Chancellor and he refers to the “stubbornly low” productivity. You can read CFG’s analysis of what low productivity means for charities in our Economic Outlook Briefings. We will of course be providing analysis is our Budget Briefing which will be published this afternoon.

12:38 – ASF

The Chancellor has said the UK is experiencing of:

  • Robust growth
  • Record employment
  • The Deficit down by over two thirds.

My Hammond has said that he expects this Budget to provide a “strong and stable platform for negotiations” and he makes reference again to Britain living within it’s means. This is important to keep in mind – we will not be seeing big spending announcements.

12:36 – ASF 

Chancellor is stepping up to the dispatch box. Hold on to your hats!

12:30 – ASF

So a quick summary of what we are expecting:

  • Growth forecasts to be upgraded for 2017
  • A smaller deficit reported as a result of higher tax reciepts
  • OBR to say that medium and long-term outlook for growth and public finances has not improved significantly
  • Tax increases – look out for increases in Insurance Premium Tax (IPT)
  • Some potential softening to welfare cuts – we will be paying attention to what this will mean for charities.
  • £20 million funding to help victims of domestic violence and abuse
  • Some funding to ease pressures on social care.

12:23 – ASF

Mark Menzies asks about the promotion of degree apprenticeships. Medical research charities who are going to pay the Apprenticeship Levy have been broadly supportive of such degrees for PhD students.

I will be listening out for Apprenticeship Levy announcements in the Chancellor’s speech.

12:19 – ASF

So we are well in to PMQs now and Theresa May has confirmed that the Budget will have some news on social care funding for councils in response to Jeremy Corbyn’s assertion that every council is experiencing a social care crisis.

Read more about what CFG expects to see on social care in the Budget and what charities need to be aware of.

Pre-Budget updates

08/03/2017 – 11:45 – AOB

An area which hasn’t got a lot of focus recently, but will be impacting charities and their beneficiaries is welfare reform. Remember that the previous government committed itself to £12bn of welfare cuts. This has been eased slightly (by around £1bn) but that means that there are still £11bn of cuts to come.

As of right now, we know we are going to see:

  • Freezes in Jobseekers Allowance, Child Benefit and Universal Credit
  • Limiting Child Tax Credit to the first two children
  • No Automatic Entitlement to Housing Benefit for some 18-21 year olds

The Guardian has hinted that some softening may take place. However, either way these reforms are going to significantly squeeze incomes for those on working-age benefits.

This has a two-fold effect on charities. Firstly, increased demand for their services. Secondly, a trend that we have noted (due to cuts in other places) is that charities are charging more (or beginning to charge) for their services. If these cuts continue, it is going to be very hard for charities to get their beneficiaries to contribute towards service delivery.

If the Chancellor was to ease back on these cuts, using better growth statistics, then that would be a very positive move. If he goes ahead, some charities will need to consider the impact on their business model.

08/03/2017 – 11:19 – ASF

Andrew has already mentioned likely ‘giveaways’ that will be announced in the Budget. Mumsnet has reported that the Prime Minister has committed £20 million of extra funding to tackle domestic violence and abuse.

This could be a welcome injection of funding for charities supporting women who have been victims of domestic abuse and violence. We will be paying particular attention to what form this funding will be made available.

As part of the campaign Grants for Good, CFG has consistently raised its concerns that grant funding made available through previous Budgets and Autumn Statements has not been fair, transparent or effective.  The campaign has developed 10 principles of good grant making which we believe the government should follow.

08/03/2017 – 10:35 – ASF

CFG’s budget coverage wouldn’t be complete without the Charity Finance Group Spring Budget Bingo card. These are the key areas that we think will be covered in today’s budget.

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08/03/2017 – 10:26 – ASF

As well as following the Chancellor’s speech, the CFG policy team will be paying close attention to the Budget document published as soon as the Chancellor sits down. It is in this document that the detail is provided – including details of any consultations that HM Treasury will launch.

For CFG we will be keeping an eye out for a consultation on how the Charity Commission is funded. Civil Society reported that the Treasury had not yet agreed to this consultation as of January this year, but we know that the Commission wants to reform the way it is funded and require the charities it regulates to pay for its running costs and is ready to launch the consultation.

So the question is, will the Treasury give the Commission what it wants and announce a consultation in the Budget today? Watch this space.*

* In the mean time you can read Andrew’s blog on why charging charities is a risky and inefficient way to pay for the regulator, as well as the research CFG commissioned which investigated the public’s attitudes to charging charities, and the latest polling from Third Sector showing that the majority of charities oppose a charity-tax to fund the Commission.

08/03/2017 – 08:40 – AOB

I am very greedy, given that I have already had my say in Third Sector but we’ve had more information come in overnight, and this gives us a clearer indication of what this Budget has in store for charities.

Brexit fears 

Firstly, it looks like that this is going to be a tinkering budget – as I said in Third Sector, the Chancellor is buying time while he waits to see what the impact of Brexit will be on the economy. Depending on the articles you read or your approach to analysing the deficit, the Chancellor is set to build up a ‘war chest’ of between £27bn to £60bn by 2019. This is significant. To put it in perspective, if he goes with a £60bn war chest – this is around 2.5% of GDP.

This means more cuts in the short term, although the Chancellor did already loosen the purse strings in the last budget.

This will put a lot of pressure on the government both economically and politically. Economically, keeping back this much spending could be challenging given all the headwinds that the UK economy is facing post-Brexit. Although the UK is performing better than expected, we are not out of the woods yet. To keep this to one side and not use it to stimulate the economy through tax cuts or spending is a brave economic decision.

Likely giveaways

Politically there are obvious pressures, such as social care, education and the NHS. It looks like schools (well free schools and grammars) are going to get something. Given this, I am certain that there will be some increases in the main schools budget to offset any political backlash. This will obviously benefit those charities which operate in close partnership with schools or charge them for services.

Social care also looks in line for up to £1.5bn in additional funding – although the method by which this will be achieved is not clear. The social care precept could be increased again, but many have criticised this because it only works in those areas where there is a strong enough tax base (and these are not the areas feeling the pressure on social care). Direct government funding of those councils that are most under pressure would be more equitable, but that might create additional political difficulties.

For charities working in social care which are already under immense pressure due to increases in the National Living Wage, the introduction of auto-enrolment for pensions and the new Apprenticeships Levy this additional funding would be welcome news.

The government has repeatedly denied that it is withholding funding from the NHS, but concerns about bed space and controversial local transformation plans mean that the Opposition is likely to keep using this as a line of attack. Will Hammond shoot this fox? It would mean implicit recognition of previous under-funding, but you never know.

Again for charities that work with the NHS, particularly in providing care and support to out-patients, this would be a positive development.

Unfortunately, it looks like (given the desire to hold aside funding for Brexit fears) that anything that is spent in one area must be taken away from others. Charities working in areas of discretionary council funding, culture, sport and the environment will be nervous.

07/03/2017 – 16:01 – ASF 

This morning CFG wrote to MPs highlighting the problem and asking them to support CFG and our partners in calling for a charity exemption for Insurance Premium Tax  (IPT).

As I have highlighted below, CFG will be keeping a close eye on any tax announcements tomorrow – specifically on whether the Chancellor looks to increase Insurance Premium Tax (IPT) to 20% to bring it in line with VAT. Something that we know HM Treasury have considered.

If IPT is increased to 20% the cost to the charity sector could rise from £50 million/year to £83 million/year. This is roughly equivalent to 0.3% on the sector’s spending on charitable activities.

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To put that figure into perspective, the average IPT bill for a charity with an income of under £500k has increased from £80 a year to £190 a year. So, an Increase in IPT will not just impact big charities, it would increase the costs for every charity – large or small.

For some organisations, insurance can be a significant part of their costs, particularly if they are relying on donations from their community.

Like any business or individuals, charities have assets that they need to protect. This can be buildings, staff or volunteers. In some cases, they are assets of national importance, such as listed buildings or areas of natural beauty. In other cases, they are vital pieces of equipment or volunteers that are delivering services to vulnerable people.

 

We can expect a cautious Budget

In a bid to manage expectations, the Chancellor has kept his cards close to his chest ahead of his first Budget.

However, over the weekend we started to be given some indication of Mr Hammond’s direction of travel: to build up Britain’s reserves to see us through Brexit, with some tax increases to cover the costs of spending on social care and business rates.

As my colleague Andrew has written, UK charities could be faced with the Bill for this approach

Keeping “enough in the tank”

The economy is performing better than was predicted: The Office for Budget Responsibility is likely to upgrade its growth forecast for 2017. Tax receipts are higher, and borrowing is being touted as coming in £10 billion lower that the Government’s (albeit reduced) target.

However, Brexit continues to cast a shadow over the economy and Mr Hammond wants ensure that the UK has “got enough in the tank” to see us through what are set to be tough negotiations with the EU.

He has been explicit that there will therefore not be announcing any big spending commitments, at least without corresponding tax increases to pay for them. .

The Tax lock introduced in 2015 means that the Government cannot increase Income Tax, National Insurance contributions or VAT over this Parliament. So the Chancellor will be forced to think creatively.

Rumours are abound that National Insurance payments for the self-employed will be increased by 3% and that alcohol duty will be increased. Our concern at CFG is that Mr Hammond’s gaze may again fall on Insurance Premium Tax (IPT).

IPT  has already doubled in the last two years. It is set to cost the charity sector between £50 million and £87 million per year – depending on the size of the charity marketplace. We have detailed our concerns with this in a charity tax plan which you can download on the CFG website.

CFG’s view is that charities should be exempt from IPT in the long term. As we set out in our policy proposals to the chancellor, in the short term the government should seek to reduce the tax bill for charities through a special rate of Insurance Premium Tax for charities.

CFG will be scrutinising announcements closely – follow this live blog to find out how any tax increases will effect your charity. It is important that charities are on the ball and plan ahead.

Social care

It is unlikely that anyone has missed news stories of the social care crisis and those thousands of charities delivering social care across the country will be acutely aware of the challenges.

Mr Hammond has said that he is listening and it seems likely that he will announce some short-term spending in inject some cash into the system. Although, speaking on the Andrew Marr Show on Sunday morning, he said that it is “not just about money” and that the government needs to take a long-term strategic view on social care.

If the Government decides to review the social care system, charities (specifically those involved in social care) will need to respond quickly to ensure that their needs and expertise, as well as the voices of the people they support, are take into account.

Business rates

Business rates are another critical issue that Hammond is likely to address.

There has been vehement push back on the business rate revaluation from businesses (especially retailers) who have argued that the increased costs will damage businesses and even see small and micro businesses close.

Charities, particularly those in London where there will be some of the steepest rises, will also face these increased costs. CFG has written to the Chancellor ahead of the Budget urging him not to forget charities in the midst of all the headlines about high street retailers.

Whilst the revaluation is unlikely to be scrapped, pressure from Backbench MPs will mean that we can expect some kind of temporary relief. Indeed, Sajid Javid, the Communities secretary, announced a couple of weeks ago that there will be a Budget concession on business rates.

CFG will be keeping a close eye on any business rate announcement. It is vital that charities are not forgotten in the furore among business leaders.

Useful links

  • Download the proposals that CFG and other leading charity sector bodies submitted to the chancellor ahead of the Autumn Statement.