Attempts to exempt charities from proposed rises to employer national insurance contributions (NICs) were unsuccessful after a debate in parliament yesterday.
Proposed amendments to the government’s national insurance contributions bill, which also included exemptions for GP surgeries, hospices, care homes and dental surgeries, were put forward by MPs and discussed in the House of Commons yesterday.
However, despite some support from MPs from parties including the Liberal Democrats, Greens, Independents and Conservatives, none of the amendments received a majority of votes.
The bill was read a third time and passed without amendments. It has yet to be debated in the House of Lords.
NICs rise ‘will force many charities to do even more fundraising’
Many of the MPs supporting amendments to the bill cited examples of charities and businesses in their constituencies which would suffer significant financial loss should the employer NICs go ahead as planned.
Among them was Liberal Democrat MP Pippa Heylings, who said: “These hikes in employer national insurance contributions are not just numbers on a spreadsheet, but will have real and damaging consequences and will strike at the heart of small and medium-sized businesses, which are the backbone of our economy.”
Later in the debate, Heylings turned her attention specifically to charities, noting that “this measure will undermine the effort to put more investment upstream, and will force many charities to do even more fundraising to backfill the gap created by the national insurance contributions hike”.
Government: UK charity tax ‘among the most generous in the world’
Many Labour MPs were quick to jump to their party’s defence in response to the criticism from opposition MPs.
Exchequer secretary to the Treasury James Murray said in the debate yesterday: “Some honourable members have tabled amendments to exclude charities from the new national insurance rate and threshold.
“However, it is important to recognise that charities can benefit from employment allowance, which this bill has more than doubled from £5,000 to £10,500.
“That will benefit charities of all sizes, particularly the smallest. The government also provides wider support for charities, including hospices, via a tax regime.
“This tax regime is among the most generous in the world, with tax reliefs for charities and their donors that are worth just over £6bn for the year to April 2024.”
Sector leaders taking ‘mitigating actions’ due to NICs rise
Responding to the outcome of the debate, head of influencing at ACEVO Roberta Fusco said: “We’re hearing and seeing on a daily basis the impact of the mitigating actions that many leaders across our sector are already having to implement in light of the NIC employer increases announced in the budget.
“ACEVO is committed to continue to work with partners to raise the voice of the sector on the impact of the NIC employer increase on the people, communities and causes we exist to support and to work constructively with officials and parliamentarians across government to ensure the impact is understood and mitigated.”
Related articles
