§ 16. Mr. BeithTo ask the Chancellor of the Exchequer what assessment he has made of the overall impact of the Budget on charities.
§ Mr. DorrellThe Budget recognised the important position of charities in our national life through the provision of special reliefs. The minimum donation limit under gift aid was lowered from £400 to £250. This will cost £30 million in a full year. The maximum limit for qualifying donations under the payroll giving scheme was raised from £600 to £900 a year at a cost of at least £1 million a year. Special payments for charities were also announced to ease the transition to the new system of tax credits. These payments will cost over £100 million over the four years of the scheme.
Charities will be affected by the increases in excise duties announced in the Budget, and by the extension of VAT to fuel and power used in domestic residential and charity buildings. The Charities' Tax Reform Group estimates that this will cost its members some £27 million in a full year.
Charities with non-domestic premises will benefit from the freezing of real increases in business rates. Charities will also benefit from the decision by the Chancellor to leave charity lotteries untaxed.