While the Autumn Statement 2023 made little explicit reference to charities, its measures will be felt by the charity sector; whether that’s in increased wage bills due to the uplifted National Living Wage, or the impact on demand from those that rely on charities’ services.
General Feedback
- There is very little directly of benefit to charities. Some ring-fenced amounts were announced for specific areas of focus, such as tackling antisemitism and mental health for veterans, but these are relatively limited, and it is unclear how this money will be spent.
- Many measures were billed as pro-growth, but the charitable sector’s vital contribution (particularly where it is stepping in more and more to deliver services the government is unable to deliver) received no real mention.
- The individual tax cut (reduction in National Insurance) is likely to be more than offset by keeping the tax thresholds frozen.
- While measures to get more people back into work are in and of themselves good, the measures announced are untested and could potentially be quite blunt. This is likely to have a knock-on effect for charities having to pick up support for vulnerable individuals who lose government welfare support. Effective and fair use of these measures depend on the Department for Work and Pensions bureaucracy working in a compassionate and accurate way. The uprating of the housing allowance is positive for people on low incomes and at risk of homelessness and the additional money (£120m) given to prevent homelessness is welcome too – but likely a fraction of what is needed.
How well do the measures meet the needs of charities?
- There is little to support charities, who are struggling with (among other pressures) government contracts not having kept track with inflation and charitable giving under pressure due to a difficult economic climate.
- The measures aimed at companies (super-computing hubs, full expensing of investment spend, and so on) will have little to no direct benefit for charities.
- Reducing National insurance, rather than income tax, is helpful for charities in that Gift Aid reclaim rates will not reduce accordingly.
- VAT relief on energy-saving materials is very positive. Ongoing support for charities with high energy costs, particularly as we enter the winter, is however lacking. Only very limited support is now available to charities, who deliver crucial services throughout this period. An example that is directly relevant is the Warm Welcome campaign, where churches and other charities open their doors to provide warm spaces for people struggling with heating bills:
- The increase in the National Living Wage, while very welcome to address economic pressures for people being paid this rate, will increase the cost pressures for charities – again, without any real contribution to offset that increase in cost.
What was missing from the Autumn Statement?
- Charities’ income is under significant pressure, they face rising cost pressures and increasing need for their services. There is very little recognition in the Autumn Statement for the burden charities carry.
- While 'growth' was front-and-centre (meaning growth of the economy), the need for charities’ services grows daily, and there was hardly any contribution towards their funding.
For further insight
Read ICAEW's analysis and reaction to the Autumn Statement. Find out more about the impact on charity tax by visiting the Charity Tax Group and read their reaction to the Autumn Statement.
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Lourens du Plessis
Lourens leads our teams who guide and strengthen churches and Christian charities with their governance and finances. Our professional services include independent examinations of charities’ accounts, an award-winning payroll bureau, consultancy and governance advisory services and helping charities get registered with the Charity Commission. He joined Stewardship in 2020 and brings with him a wealth of experience in both the charity and commercial sectors. He’s a member of the Charity Community Advisory Group of the Institute of Chartered Accountants in England and Wales, and regularly interacts with regulators in the sector.
Before joining Stewardship he worked for an international church developing governance and financial stewardship for various ministries. Prior to that Lourens had a senior role at a Big Four firm in the City, advising international investment banks. He is a qualified Chartered Accountant and has a postgraduate degree in Theology.
Lourens grew up in South Africa, but has spent the majority of his working life in London. He is a member of the International Presbyterian Church in Ealing. He is also a trustee of a number of other churches and charities, including a new pregnancy counselling centre, and he’s involved in initiatives to help Christians better integrate their faith and work.
Lourens supports causes which encourage bringing the gospel to people in his neighbourhood and to the ends of the earth, and particularly supporting persecuted Christians around the world.
