What was in the 2021 budget for charities?

The budget is the big set piece of the government’s finances and the impact of the 2021 budget for charities was highly anticipated. It has been seen as a key moment for setting the direction of the economy following both the pandemic and the implementation of Brexit.

The reaction from the charity sector

The reaction from the charity sector to the annual ‘set piece’ of the government finances – the budget has been underwhelming at best.

It’s worth noting that there was little mention of the charity sector and the Chancellor has not taken specific action. Many in the sector are warning of a crisis – for example the Charity Finance Group described the sector as being “balanced on the cliff edge of rising demand and reducing income”. However there are measures in the budget that will help charities.

What was in the budget for charities?

The areas that the 2021 with benefit or affect charities are some of those that are also of interest to other organisations particularly employers.

  • The coronavirus Job Support Scheme (furlough) will continue until the end of September. Employers will contribute 10% of wages in July and 20% in August and September. This may help charities who are facing an inability to deliver services to keep staff on the payroll. There is also the possibility that people may be available to volunteer while furloughed.
  • An increase to the National Living Wage to £8.91 per hour from April. If you are a charity working with those in poverty your beneficiaries may benefit. Charities who employ low wage staff will need to be factor it in to budgets.
  • Small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) costs from the government.
  • If your charity has a shop or café you may be eligible for a Restart Grant. This is up to £6,000 per premises for nonessential retail businesses and up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses.
  • The government will continue to provide eligible retail, hospitality and leisure properties in England with 100% business rates relief from 1 April 2021 to 30 June 2021. They will follow this with 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business. If your charity has a premises that isn’t eligible, check with your local authority whether they will be offering any support on a discretionary basis.

Further information

If you are involved in a small business or self employed you may be interested in this companion blog post on the budget from a small business perspective.

For regular updates as more information comes available, make sure you get our free monthly newsletters focused on charity finances.

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