The topic of business rates has been in the news for some time. The announcement of a 50% discount for retail is likely to be good news for charities which run shops.
Charities involved with overseas activities will no doubt be pleased to see that foreign aid expenditure is projected to return to 0.7% of GDP by 2024/25.
The increase in the National Living Wage to £9.50 per hour from April 2022 will be welcomed by charities whose beneficiaries include the lower paid, as around 2 million lower paid workers will benefit. The impact of this increase will also affect charities’ own cost structures, particularly as it is a sector where wages are generally lower than the public and private sectors. Not only will it affect those currently earning the National Living Wage, but there may be ongoing pressures on salaries generally. This may come from individuals earning just above the minimum level who may see their ‘differential’ compared to the lowest paid being eroded, and who may therefore feel that they should also have an increase. This also comes on top of the increases in national insurance announced earlier in the year.
So, there is some good news for charities, but no doubt many will be disappointed that there was nothing to help improve the efficiency of the Gift Aid system or deal with the complexity of VAT for charities. Indeed there is little sign that the topic of charities suffering the cost of VAT will be addressed any time soon.