The Chancellor has published the Autumn Statement. The key measures for charities are outlined below and the overall announcements are also summarised here.

Lack of Charity in Autumn Statement

Richard Bray, CTG Chair, today commented:

“While recognising that the Chancellor’s priority was to stimulate growth and support business, we had hoped that the Autumn Statement would have contained at least some measures to help charities, many of whom are struggling to maintain the services on which many depend. Along with others, CTG had argued for the introduction of some simple and inexpensive reforms, particularly in relation to goods donated by businesses to charity. Their absence and the general lack of acknowledgement of charities is a significant disappointment.

“In the longer term, we hope that the measures announced today will help to alleviate the pressures that many feel and will also ease some of the pressures that charities currently face and that the Chancellor will include measures to support charities in the Spring Budget.”

 

Main announcements of interest

Reforms to Energy-Saving Materials VAT Relief

Prior to 2013, VAT relief was available for installation of energy saving materials in charitable premises. However, this was withdrawn as being inconsistent with EU law.

Since then, the relief has been reintroduced and, following a call for evidence, the Government will now expand it to include additional technologies such as water-source heat pumps and bring buildings used solely for a relevant charitable purpose back within scope.

These reforms will be implemented UK-wide in February 2024. Full details will be published shortly.

National Insurance contributions cut

Employee National insurance is to be cut from 12% to 10% from 6 January 2024. This will mean that employees earning over the £12,570 annual threshold will see an increase in take-home pay.

For those working in the charity sector that are self-employed, the weekly Class 2 National Insurance contribution is to be abolished, and the earnings-related Class 4 contribution rate is to be cut from 9% to 8% from 6 April 2024.

National Living Wage increase

From 1 April 2024, the National Living Wage will increase by 9.8% to £11.44. Workers over the age of 21 will become eligible for the adult rate (the age threshold is currently set at 23 years old).

Whilst the national insurance reforms have a largely administrative impact on charities, the increase in the National Living Wage will have budgetary implications that will need to be taken into account in the 2024 budgeting process.

Business rates and business rates discount for hospitality, retail and leisure

Charities with rateable premises will see the main business rates multiplier increase from 51.2p in the £ to 54.6p. However, for 2024-25, the small business multiplier in England will be frozen for a fourth consecutive year at 49.9p in the £.

The 75% business rates discount for eligible hospitality, retail and leisure properties is being extended to 2024-25.

Benefits

Benefits will increase next year by 6.7%, the inflation rate for September 2023. This applies to working-age benefits such Universal Credit, and disability benefits.

Capital allowances

Charities that have trading subsidiaries, or that are otherwise within the charge to corporation tax, will see the 100% tax relief (first year allowance) for investment into IT, machinery and equipment that was due to end on 31 March 2026 made permanent. This measure is intended to provide businesses with future certainty over their investment decisions.

Local Housing Allowance rates increase

The Government will raise Local Housing Allowance rates to the 30th percentile of local market rents in April 2024.

Off-Payroll Working (IR35)

The Government will legislate in the Autumn Finance Bill 2023 to allow HMRC to reduce the PAYE liability of a deemed employer to account for taxes paid by a worker and their intermediary on payments received where an error has been made in applying the off-payroll working rules.

Extending the Employer NICs relief for employment of veterans 

The Government is extending the NICs relief for employers of eligible veterans for one year. The relief means businesses pay no employer NICs on annual earnings up to £50,270 for the first year of a qualifying veteran’s employment in a civilian role.

Van Benefit Charge and Car & Van Fuel Benefit Charges 

The Government will maintain the Van Benefit Charge and the Car & Van Fuel Benefit Charges at 2023-24 levels for 2024-25.