Charities: Employers' Contributions

The recent Budget took the tough choices needed to fix the foundations and restore economic stability. DCMS Ministers have spoken to representatives from the voluntary, community and social enterprise (VCSE) sector and are aware of their concerns about the impacts of the increase to employer National Insurance Contributions (NICs).

The government acknowledges that these changes will affect all sectors of the economy, which is why we have put in place mitigations to protect smaller organisations in particular, by more than doubling the Employment Allowance to £10,500. This means that next year, 865,000 employers (43%) will pay no NICs at all, and more than half of employers will see no change or gain overall from this package.

We are also expanding eligibility of the Employment Allowance by removing the £100,000 eligibility threshold, to simplify and reform employer NICs so that all eligible employers now benefit. Employers will also continue to benefit from employer NICs reliefs including for hiring under 21s and under 25 apprentices, where eligible.

Within the tax system, we provide support to charities through a range of reliefs and exemptions, including reliefs for charitable giving. Our tax regime for charities, including exemption from paying business rates, is among the most generous of anywhere in the world, with more than £6 billion in charitable reliefs provided to charities, Community Amateur Sports Clubs and their donors in 2023 to 2024. The biggest individual reliefs provided are Gift Aid at £1.6 billion and business rates relief at nearly £2.4 billion.