Budget Round Up And Museums & Galleries Tax Relief Update

This week’s budget was dominated by news of the slow down in the UK economy, but what did it contain for museums and heritage organisations?

  •  A £2 million Cultural Development Fund for DCMS was announced, but no further details are available at the moment.
  •  Changes to Gift Aid donor benefit rules, that will take effect from 2019, were announced.
  •  Separately from the Budget, the previously announced Museums & Galleries Tax Relief has been passed into law, meaning claims backdated to 1 April 2017 can now be made. Arts Council England is updating the guidance on its website to reflect this development:

Museums and Galleries tax relief

The Heritage Alliance and Charity Tax Group have both provided full coverage of the budget. Key extracts from their reports are given below.

The Heritage Alliance

The Chancellor, Phillip Hammond, has presented the Autumn Budget, the second budget of 2017. The key heritage announcements include £4 million to Jodrell Bank, the UK’s next candidate for UNESCO World Heritage Site status and £2 million DCMS Cultural Development Fund funding for place-based cultural development.

The supporting documents reveal details of the Centenary fund, announced in the Spring Budget 2017, which gave £5 million for projects celebrating the centenary of the first British women to get the vote in 1918. From this, £1.2 million will fund activities in 7 places with strong links to the women’s suffrage campaign– Bolton, Bristol, Leeds, Leicester, London, Manchester, and Nottingham. The Government will allocate the rest to local projects and a statue of Millicent Fawcett in Parliament Square. No detail is given of how applications can be made to the fund. The Alliance will endeavour to share this information as soon as possible.

Review of VAT rates and exemptions: The Chancellor has responded to the OTS VAT review proposals stating that ‘The Government’s ability to amend the scope of the various rates and exemptions is limited to some extent by EU law at present. It is clear that the current rates structure is the root cause of much of the complexity in the VAT system… I agree that there is merit in a review of the current system of VAT rates and reliefs in the longer term, and HMRC and HM Treasury officials will continue to engage with the OTS on this subject”. The Charity Tax group has set out more on other VAT and Tax changes here;

Increasing the National Living Wage from £7.50 to £7.83 from April 2018;

Read the Heritage Alliance report here:

The Heritage Alliance Autumn Budget Summary


Charity Tax Group

Gift Aid donor benefit rules – Following the review of the Gift Aid donor benefit rules, to simplify the rules for charities the current three monetary thresholds will be reduced to two, while all existing extra-statutory concessions will be legislated (which relate to split payments, literature as having inconsequential value, averaging rule and lifetime benefits). Changes will come into effect from April 2019.

Under the new limits the benefit threshold for the first £100 of the donation will remain at 25% of the amount of the donation. For larger donations charities can offer an additional benefit to donors, up to 5% of the amount of the donation that exceeds £100. Some examples are provided in the table below. The total value of the benefit that a donor can receive remains at £2,500.

 Making Tax Digital (MTD) for VAT: As announced in July 2017 and legislated for in the Finance (No. 2) Act 2017, no business will be mandated to use MTD until April 2019. Only those with turnover above the VAT threshold will be mandated at that point, and then only for VAT obligations. The scope of MTD will not be widened before the system has been shown to work well, and not before April 2020 at the earliest. Charities and their subsidiaries will be required to comply and further details on what this means in practice can be found here. CTG will also be working with HMRC officials throughout the pilot stage next year to ensure the system works for charities.

Employer provided living accommodation – The planned consultation on this tax exemption, which is very important to a number of charities (particularly churches, heritage organisations, universities, hospices and schools) was not announced, although we understand from HM Treasury officials that this is still likely to be published in Spring 2018.

Read the Charity Tax Group report here:

Charity Tax Group: Autumn Budget 2017 – Implications for charities




Advertise With AIM

Advertise your jobs, trustee vacancies and products or services with AIM and reach over 60% of the UK museum sector

AIM Success Guides

Take a look at our series of useful guides for museums and heritage organisations

AIM Member Trustee Vacancies

Take a look at the latest trustee vacancies at AIM member organisations