New Forest

03/05/2022

Sprint Statement 2022

On 23 March the Chancellor made his Spring Statement, which contained a number of tax measures of interest to charities. The most significant of these is a planned reduction in the basic rate of tax to 19% to take effect from April 2024. This will impact upon the amount of Gift Aid charities will be able to claim on relevant donations, reducing the amount that can be claimed. Fortunately though, a three year transition period will apply, deferring the impact of the change and saving the sector an estimated £250 million. There is currently uncertainty as to whether the transition rules will also apply to the small donations scheme.

Note that the change to the basic rate of income tax does not apply to Scotland as the power to set tax rates is devolved to the Scottish Government.

For those charities that are employers it was confirmed that the planned rise in national insurance rates coming into force in April 2022 will remain, but from July 2022 the annual primary threshold will increase from £9,880 to £12,570 which will reduce the amount of national insurance employees are required to pay. Employers will be able to benefit from an increase to the employment allowance to £5,000 per year from April.

A temporary cut to fuel duty of 5p per litre on both petrol and diesel was announced and took effect from 23 March, designed to reduce the impact of increasing fuel prices, caused in part by the war in Ukraine.

Although these changes are welcome, whether they go far enough to help with the rapidly increasing cost of living remains to be seen. With inflation now at 6.2% based on the Consumer Prices Index in February many charities are facing increased costs at the same time as they are experiencing increased demand for their services. Charities will need to manage their finances with considerable care for some time yet.

Details:
https://bit.ly/3IITdUX

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HMRC has announced their new Advisory Fuel Rates (AFRs) for Employees and Directors using a company car.

To read more, click the link 👉 https://bit.ly/3EiHCgr

The Energy Bill Relief Scheme will help to cut energy prices for businesses, charities and public sector organisations, such as schools and hospitals.

The scheme will run for 6 months and cover energy used from 1 October 2022 to 31 March 2023.

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