MPs have voted to reject amendments tabled in the House of Lords which would have exempted small charities from upcoming the rise in employer national insurance contributions (NICs).
Peers had previously voted in favour of exempting charities with an annual income of less than £1m from the upcoming NICs increase.
They had also proposed an amendment which would have required chancellor Rachel Reeves to conduct an impact assessment of the NICs increase in a variety of sectors, including charities.
However, MPs rejected both proposed amendments yesterday when the NICs bill returned to the House of Commons for its final stage before royal assent.
MPs’ reasons for rejecting proposals to exempt small charities were: “Because the Lords amendment interferes with the public revenue, and the Commons do not offer any further reason, trusting that this reason may be deemed sufficient.”
Meanwhile, MPs’ reason for not requiring Reeves to conduct an impact assessment was: “Because information has already been published about these matters and a further review is not necessary.”
CFG ‘disappointed’ peers’ amendments rejected
Richard Sagar, head of policy at umbrella body Charity Finance Group (CFG), said: “We are disappointed that the Lords’ amendments have not been passed by the Commons today.
“Peers set out a full and fair case for the exemption of charities under £1m and rightly expressed their concerns with the government’s rise in national insurance contributions.
“We are grateful to them for putting forward these amendments – they would have given small charities much-needed breathing space during what is proving to be an incredibly difficult operating environment.
“A survey we conducted in February shows that charity leaders are as concerned about the increase in National Insurance as they were five months ago when the chancellor delivered her first budget, with 82% of respondents either ‘very’ or ‘moderately concerned’ about affording the rise.
“Many small charities deliver essential support for people across the country, and many of them will now be faced with a difficult decision regarding cuts to these services, which will in turn impact greatly on those who need them.
“We hope that the chancellor’s spring statement and spending review can provide better news for the sector which is much needed.”
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