How to choose the right bank for your charity
Choosing the right bank account is an important decision for any charity.
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The Chancellor of the Exchequer delivered her Autumn Budget on Wednesday 26 November, announcing a range of measures that will affect the charity and voluntary sector.
The Chancellor’s headline announcement was the removal of the two-child limit on Universal Credit which prevented parents from claiming Universal Credit for their third child. The cap will be removed from April 2026, and is estimated to lift 450,000 children out of poverty, which in turn may reduce families having to turn to charities for support.
The Budget’s Red Book confirmed a new VAT relief will be introduced from 1 April 2026 for business donations of goods to charity for distribution to those in need or use in the delivery of their charitable services. The VAT relief will only apply to goods valued up to £100, with a threshold of £200 for more expensive items such as laptops, carpets, and white goods. This was previously announced and consulted on earlier in the year and is hoped to increase charitable donations by businesses and reduce the volume of goods that are sent to landfill.
The Chancellor announced an increase to the NLW for those over 21 years old, increasing by 4.1% to £12.71 per hour. NMW for 18–20-year-olds and 16-17-year-olds will increase by 8.5% and 6.0% respectively. These changes will come into effect from 1 April 2026 and will increase charity payrolls for their lowest-paid staff.
From 2029 the Government will cap National Insurance contributions (NICs) relief on salary sacrifice into pension schemes to the first £2,000 of pension contributions per person. Employee and employer NICs will be charged in the usual way on the amount above £2,000 for those who contribute above this. Charities who offer pension salary sacrifice will see an increase in costs from 2029.
The previously announced Office for the Impact Economy was mentioned in the Red Book, highlighting its role in supporting government departments to partner with social and impact investors, purpose-led businesses, and philanthropists to support growth and bring in more capital. The Government has already started working with the impact economy to support the Pride in Place Programme to support deprived communities, and the Better Futures Fund to support vulnerable children and young people.
Some previously announced changes to charity tax compliance and unused pension funds being included in the value of a person’s estate for Inheritance Tax purposes, were also included in the Red Book and the changes will be legislated for in the Finance Bill 2025-26.
Link to the Chancellor’s full speech and the Budget Red Book for further detail.
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Choosing the right bank account is an important decision for any charity.
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