Chancellor, Jeremy Hunt, delivered the Government’s Autumn Statement on 17 November.
Churches provide vital support to society, not just in material terms, but in emotional, mental and spiritual ways as well. It is therefore vital that they, and charities in general, are given every opportunity to thrive in today’s challenging times, where we are seeing demand for services continue to rise at the same time as donors experience a decrease in disposable income.
In this context, it was disappointing that the Autumn Statement contained no charity-specific measures. However, there were changes announced that will have an impact on charity finances that charities, including churches, will want to factor into their planning:
- Whilst no one would want to decry next April’s increase in the National Living Wage, the increases announced (at between 9.7% and 10.9%, depending on age), will add significant cost to some charities’ wage bills.
- The freezing of the income tax personal allowance until April 2028 will draw more people into paying higher rate tax as wages try to keep pace with inflation. This, together with measures targeted at high earners, investors and savers, has the potential for a dampening effect on charitable giving.
- Charities that have business activities may find themselves drawn into VAT registration, as the VAT registration threshold is being frozen until April 2026. Unless the resultant (normally 20%) price increase can be absorbed by customers, this will result in a decrease in the charity’s net revenue.
Churches will need to be realistic about budget forecasts. They will of course also want to be sympathetic to members’ personal circumstances. But they can still actively encourage giving and philanthropy and, in the right circumstances, seek grant funding.
God has a habit of putting individuals in a position to respond “for such a time as this”, as illustrated in Mordecai’s words to Esther (in Esther 4:14). Paradoxically, time and again the Christian community has seen increased support at times of crisis and indeed, when raising an offering for the church in Jerusalem, the Apostle Paul commends the Macedonian churches for their rich generosity in the midst of a time “of very severe trial” and “extreme poverty” (2 Cor 8:1-4). And he concludes “Thanks be to God for his indescribable gift!” (2 Cor 9:15). Surely, this is not a time to retreat, but to exercise and extend our faith!
To find out about Stewardship’s cost of living campaign and our practical call to action, please visit our Cost of Living Response Fund (stewardship.org.uk).
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