Coronavirus and charities: UK Government support package announced

20 April 2020 | Applicable law: England and Wales

The Chancellor has announced that frontline charities across the UK will receive a £750 million support package. In the announcement the government has said that tens of thousands of charities will benefit from cash grants, so that they can continue their activities while also meeting the increased demand on services cause by the virus.

It should be noted however, that the support announced is focused on assisting charities directly involved in the coronavirus response. £360 million in cash grants will be allocated to charities that are providing key services and supporting vulnerable people. Government departments are currently working to identify priority recipients so that funds can be allocated in the coming weeks. The criteria that will be applied when selecting which charities will benefit has not been set out in detail, however the Government has listed the following examples of charities that will be included:

  • Hospices;
  • St John's Ambulance;
  • Victims charities and in particular those that deal with domestic abuse;
  • Vulnerable children charities; and
  • Citizens Advice

The extent to which there is flexibility to provide assistance to charities that support other needs than those highlighted by the Government is not clear.

A further £370 million has been allocated to support small and medium-sized local charities who are providing services during the outbreak such as delivering food, medicine and providing financial advice. Part of this will be provided through a grant to the National Lottery Community Fund. An application system to access grants from the fund is also expected to be operational "in the coming weeks". Details on the application process and the criteria are not currently clear, for example, whether funding will be based on an increase in demand due to coronavirus, or a loss of income.

The revenue loss that charities will face as a result of the outbreak is suspected to be in the region of £4 billion according to NCVO. The Chancellor said in his announcement that the government is not able to match every pound of spending charities would have received this year, but that this builds upon other support that is available to charities as businesses such as the VAT deferral and the Job Retention Scheme.

The government will contribute further funds to the charity sector by match funding what is raised from the public during BBC's Big Night In fundraising event taking place on the 23 April, with a donation of at least £20 million to the National Emergencies Trust appeal.

Following the announcement of the support package, a group of 28 organisations have written an open letter to the government, urging for more tailored support to be offered to the charity sector. The letter suggests that there are two policies that would widely benefit charities if introduced. The first is a Charitable Coronavirus Job Retention Scheme, allowing charities to claim 80% of employee wages from the government but without the requirement that those staff are then furloughed. The second is to increase the rate of Gift Aid charities can claim on donations to 50% until the end of August.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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