Norfolk Community Foundation Reacts to The Budget
What does the budget mean for Norfolk charities?
Rachel Reeves unveiled the October budget, which aims to levy £40 billion in taxes while improving public services and shielding working people from increased costs. There were lots of key wins. Funding for key public services like health and social care, housing and schools where many challenges facing those in crisis can be met can only be a good thing, but there are also some changes and opportunities which may impact local charities, too.
After having some time to digest and think things through, we went around the office, asking what our team thought about the headlines…
Joanne Dale reacts to: Changes in Tax
The jury is out on whether the tax will lead to an increase or decrease in charitable giving.
We’d like to see employers use Payroll giving to help reduce their tax bill while encouraging employees to donate to good causes, like our Missions. When employees give through a payroll giving, they can help reduce an employer’s National Insurance contributions because payroll giving donations are taken from gross pay. The knock-on effect is that this reduces employer-paid National Insurance costs, as the reduced taxable income effectively lowers the NI that an employer would owe.
Furthermore, gifts to charities are exempt from inheritance tax (whether made during a person’s lifetime or via their Will on death), and so donations to charities may, with a little tax planning, prove to be a more attractive way to reduce an individual’s inheritance tax bill. With news that Capital Gains Tax is going up, philanthropically-inclined individuals may want to consider planned giving strategies or direct gifting of assets to mitigate these rises.
We’re looking forward to continuing our work with Professional Advisors, who will be keen to support their clients mitigate tax and to improve lives across Norfolk through donations, leaving legacies, and gifting shares with help from the Foundation.
Laura Wigby reacts to: National Insurance & Minimum Wage
A common misconception is that everyone involved in a charity is a volunteer! Of course, this is not true, and we are lucky to have a large number of professional, skilled employees in the sector. The workforce is dedicated and passionate and should be well compensated for their hard work – and the rise in minimum wage will ensure that the commitment of local charity workers is recognised.
However, even though many smaller charities will benefit from the Employment Allowance threshold almost doubling, the expected rise in employers’ National Insurance contributions from 13.8% to 15% will no doubt add additional strain to small charity administration budgets.
We encourage groups applying for funding to be realistic about their core costs and project budgets when considering the impact of the increased ongoing delivery of their vital work.
Corrie Colson reacts to: Carer’s Allowance
If there’s one thing that overseeing the Millennium Trust for Carers has shown me, it’s just how hard and diligently Norfolk’s unpaid carers work. Those who tirelessly care for their loved ones have got some good news today. I think it’s brilliant that the maximum earnings threshold will rise, and I’m sure that lots of local charities will also be pleased with this news. Regardless of these changes, the Millennium Trust for Carers Fund will still be there to support unpaid carers to improve their quality of life.
Megan Pay reacts to: More School Spending
Heading up the Sir Norman Lamb Coalition for Young people, I am pleased to hear that funding for young people special educational needs and disabilities (SEND) will be going up in schools. The Coalition supports all young people’s mental health and wellbeing, but also has a specific focus on those with SEND. While this support is welcome, we know that many families will still be seeking emotional support and social opportunities for their children outside of school settings – so our work with Coalition members and the wider sector will still be of huge value going forward.
Victoria Lewis reacts to: Fuel duty
Living rurally myself, the freeze on the 5p cut to fuel duty on petrol and diesel is welcome news. With limited access to public transport, and the £2 bus fare cap soon disappearing, living and working in or from rural areas in Norfolk continues to be expensive, so the freeze is a relief. Car ownership is a necessity for many in Norfolk, and while we need to think about the planet, we need to think about communities, too. Charities like North Norfolk community transport will appreciate this, as will Norse Group’s N-Able fleet, which helps our Nourishing Norfolk network get affordable food into the most isolated areas.
The budget has brought with it some things to celebrate in our sector, but also some things to think about. Going forward, we will as ever be here to support our local communities with funding, support and opportunities to make Norfolk shine brighter.
