How will the Spring Budget 2024 affect charities?

Many charities continue to experience raised levels of demand for their services, and they fully expect this to continue as the cost-of-living crisis continues. At a time when there is this surge in demand and funding uncertainties, charities have been offered relatively little direct tax relief in the Spring Budget 2024.

Several specific measures are welcomed:

• Household Support Fund extended; loan extension for users of Universal Credit; Child Benefit threshold increased; and debt relief order fees scrapped
• Extra £5 million in support for Village Hall capital improvement funding
• Extra £45 million in support for life-saving medical research
• Tax reliefs for theatres, orchestras, museums and galleries made permanent from 1 April 2025
• VAT registration threshold rises from £85,000 to £90,000
• Employee National Insurance cut from 10% to 8%

Jubilee Village Hall Funding

This £3 million funding scheme was introduced in 2022 to assist with capital renovation costs for vital community assets. It’s a charity managed fund, administrated by the government Department for Environment, Food and Rural Affairs (Defra). In the Spring Budget 2024, it was announced that there will be an additional £5 million funding added to this scheme, to support communities at a time when community spirit is ever important.

According to the charity ACRE (Action with Communities in Rural England) who manage the fund: “Grants are intended to support smaller capital projects in village halls such as boiler replacements, insulation, toilet upgrades and new kitchens.”

It’s unclear whether the conditions and limits which were applied to the previous round of funding will be subject to changes.

Funding for life-saving medical research

The Budget introduced significant support for medical charities conducting life-saving research, allocating £45 million specifically for this purpose.

Charities including Cancer Research UK, Epilepsy Research UK, and Medical Research Scotland will receive this funding.

Cultural tax reliefs made permanent

Prior to the Spring Budget, cultural tax reliefs were due to taper from 1 April 2025 onwards. The Society for London Theatre, in a report in February 2024, predicted that theatre organisations could have faced a 28-30% reduction in number of productions and playing weeks if the planned reductions were to have gone ahead.

The Spring Budget announced that from 1 April 2025, the rates of Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR) and Museums and Galleries Exhibition Tax Relief (MGETR) will be permanently set at 40% (for non-touring productions) and 45% (for touring productions and all orchestra productions). These rates are 5% below the current rates. The Government will remove the sunset clause for MGETR so that it becomes a permanent tax relief, with no expiry date. The rate changes are shown below:

For further information please get in touch with your usual Larking Gowen contact or a member of our Not for Profit team. You can find contact details on the Our People section of the Larking Gowen website. Alternatively, call 0330 024 0888 or email enquiry@larking-gowen.co.uk.

 Giles Kerkham