Following the Chancellor’s Budget announcement on 30 October 2024, our Charities and Non-profit team have put together a brief summary of the changes and how they will impact the Charities and non-profit sector.
- Increased Employers National Insurance Contributions (NIC) from 13.8% to 15% from April 2025, which will impact any charities with employees, although the increase in the Employment Allowance from £5,000 to £10,500 will help as some very small charities will now pay no NIC
- National Living wage increased to £12.21 per hour from April 2025 will again impact some charities. This could have an impact on some salary sacrifice arrangements
- Tougher “fit and proper person” test in order to access charity tax reliefs. Those who repeatedly fail to comply with tax obligations such as filing returns on a timely basis could be regarded as failing this test
- Changes to the tests on tainted donations from April 2026, so a series of transactions can be considered, rather than just a single transaction
- Change to the rules on qualifying charitable investments, expected from April 2026 – all investments must be made for the benefit of the charity and not for the avoidance of tax, not just the “type 12” catch all category
- VAT on private school fees from 1 January 2025, as previously announced
- Also loss of Business Rates relief for private schools which are charities, from April 2025
- Some Business Rates announcements which could benefit smaller charities.
If you would like to discuss the points above in more details and how they might affect your charity, please get in touch with our team.
If you missed our latest Budget event, you can watch the recording of our seminar and view the latest report here.
This article was correct at time of publication.
