Charities: Employers' Contributions
The question
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential impact of changes made to employer's National Insurance contributions at the Autumn Budget 2024 on the (a) staffing levels of and (b) level of (i) economic and (ii) social contributions to charities; and if she will make it her policy to exempt the charitable sector from these changes.
Answered by James Murray
In order to repair the public finances and help raise the revenue required to support public services, the government has taken the difficult decision to increase employer National Insurance contributions (NICs).
HMRC published on 13 November a Tax Information and Impact Note that covers the impact of the changes on charities as employers.
The Government has protected the smallest businesses and charities from the impact of the increase to employer National Insurance by increasing the Employment Allowance from £5,000 to £10,500, which means that 865,000 employers will pay no NICs at all next year, more than half of employers will see no change or will gain overall from this package, and all eligible employers will be able to employ up to four full-time workers on the National Living Wage and pay no NICs. All charities are eligible for the Employment Allowance, even if they are wholly or mainly carrying out functions of a public nature.
More broadly, within the tax system, we provide support to charities through a range of reliefs and exemptions, including reliefs for charitable giving, with more than £6 billion in charitable reliefs provided to charities, CASCs and their donors in 2023-24.
Verbatim has judged this answer against the question that was actually asked — answered, partly answered, or evaded. Sign in to see the verdict →