November 23rd, 2016 / Insight posted in Articles

Autumn Statement 2016: Not for Profit

This year’s Autumn Statement contained a number of measures that will be of interest to specific groups within the sector.

Museums and Galleries Tax Relief

The Government consulted earlier this year on the form of a tax relief for Museums and Galleries. It was originally intended that this would give tax relief only to those institutions that put on temporary or touring exhibitions, although it is now proposed that this will be available to those that run permanent exhibitions too. The Government was previously silent on the proposed rates of tax credit relief, but these have now been announced as 25% for touring exhibitions, and 20% for non-touring exhibitions – in practice, this means that an institution incurring qualifying expenditure of £500,000 (the maximum in respect of which relief is available) will be entitled to a tax credit of £100,000 for a touring exhibition or £80,000 for a non-touring exhibition.

This measure will be introduced from 1 April 2017, and will automatically expire in April 2022 if not renewed before that point.

KS comment: This new relief will be of benefit to a number within the sector; the extension of the relief to permanent exhibitions is to be welcomed, although the capping of the relief will be slightly disappointing for some.

Social Investment Tax Relief

Various changes are going to be made to the Social Investment Tax Relief with effect from 6 April 2017. The amount of investment that social enterprises aged up to 7 years old can raise will increase significantly to £1.5m. However, certain activities, including asset leasing, and running nursing and residential care homes, will be excluded. In addition, the limit on full-time equivalent employees will be reduced from 500 to 250.

KS comment: Many of those charities and other bodies that SITR is important to will benefit from the ability to raise more funds under the scheme, although there will be some losers. The Government will undertake a review of SITR within two years of the changes, and we would hope that the Government does not use this opportunity to make further restrictions in the future.

Gift Aid Digital

The Government confirmed its intention to give intermediaries that collect donations on behalf of charities a greater role in administering Gift Aid. In turn, this will simplify the Gift Aid process for donors making digital donations through those intermediaries by reducing the number of individual gift aid declarations that need to be made.

KS comment: This change is to be welcomed if it ultimately means that Gift Aid can be claimed for a greater number of charitable donations.