Budget 2007

In addition to the many changes in the 2006 Charities Act, new measures affecting charities were introduced by the Chancellor in the 2007 budget. These are:

• cutting the basic rate of income tax from 6 April 2008 from 22% to 20% will reduce the amount a charity will be able to reclaim on gift aid payments
• a relaxation of the rule where a benefit received by a donor is much less than the value of the gift. The transaction is effectively a donation although the donor receives something in recognition. The limit on the benefit of gifts of £1,000 or more has been 2.5% of the gift, subject to a maximum of £250. From 6 April 2007, these limits have increased to 5% and £500. This change may be helpful at charity auctions where a very large amount is paid for a trivial purchase.

If you would like to discuss any of these changes in more detail please contact us.