2014 Autumn Statement – Charity Law
The Chancellor, George Osborne, delivered his Autumn Statement on 3 December 2014. There were few areas which the Chancellor addressed in relation to charity law and they are summarised as follows:
1. Social Investment Tax Relief
The Social Investment Tax Relief Scheme falls within the European Commission's de minimis threshold for state aid by setting the maximum amount that an investor can currently invest in eligible social enterprise at €344,827 (approximately £275,000) in a 3-year period. There has been confirmation that this de minimis threshold is too low to have any impact on the social investment market and in the summer HM Treasury consulted on its proposals to increase this threshold. In his Autumn Statement of this year, George Osborne confirmed that the Government will seek EU approval to increase this annual threshold to £5 million, subject to an overall increase to £15 million per organisation and in addition to this, allow certain small scale community farms and horticultural activities which are not eligible for direct payment under the Common Agricultural Policy reforms to be qualifying trades for the purposes of the Social Investment Tax Relief Scheme. Provided that England gets state aid clearance of this any changes will come into effect after 6 April 2015.
The Government also confirmed it intends to consult further on a new relief for indirect investment in social enterprises and will consult in early 2015 on introducing a social venture capital trust in a future finance bill.
2. Gift Aid on Digital Giving
The Government will introduce legislation in the Finance Bill 2015 to allow non-charity intermediaries (such as text donation operators) to take a greater role in operating Gift Aid. The aim and objective of this is to make it easier to claim Gift Aid on digital giving.
3. Charity Donor Benefits
The Government has confirmed that it will continue in its review of extending the rules for claiming Gift Aid on membership and entrance fees. The review was initially launched at the Budget 2014 and the Government intends to work with the Charity Sector to obtain clarification on its guidance.
4. VAT Refunds
The Government also confirmed it intends to introduce provisions which enable UK Search and Rescue Charities and Air Ambulance Charities to claim refunds on VAT which has been incurred in the purchase of goods and services used for non-business activities. This will be effective from 1 April 2015. We await further details on this measure, but the measure will be largely welcomed by the Charity Sector.
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.