Charities to claim record tax relief in 2016/17, forecasts say

Income tax exemptions for charities will hit a record £2billion at the end of this financial year, official Government forecasts show.

HM Revenue & Customs (HMRC) predict 2017 will see exemptions increase by more than £70m year-on-year.

The estimates include VAT, Stamp Duty Land Tax (SDLT), and Gift Aid relief, the latter of which is exclusive to the not-for-profit sector.

Records show that charities’ income from these exemptions has increased by almost £400m since the tax year 2012/13.

The figures put SDLT relief at an estimated £185m – a drop of £95m on the previous year. HMRC reasons that SDLT was reformed – from an all-encompassing rates system to a marginal one – in the 2014 Autumn Statement, while large changes in SDLT relief are common because of “very large one-off relief claims”.

It adds that the SDLT data for the previous tax year is provisional and is subject to revision.

Meanwhile, VAT relief is predicted to be worth £400m to the sector in 2016/17, compared to just £250m in 2012/13.

Reports suggest that the forecasts, released earlier this month, do not include business rates relief.

The full forecast for 2016/17 can be found here.

At Milsted Langdon, our charities team can carry out a full review your financial position, as well as assisting you to manage, plan and grow your charity by looking at important issues affecting you now, and what might happen in the future. For more information, please contact us.

Posted in Charities.