Charities: Employers' Contributions

At the recent Budget, the government took a number of difficult decisions on tax, welfare, and spending to fix the foundations of the public finances, fund public services, and restore economic stability.

The government recognises the need to protect the smallest businesses and charities, which is why we have more than doubled the Employment Allowance to £10,500. This means that more than half of businesses (including charities) with NICs liabilities will either gain or see no change next year, such as those in the South Cotswold constituency.

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. Businesses and charities will still be able to claim employer NICs reliefs including those for 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. More than £6 billion in charitable reliefs was 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.

DCMS does not hold the specific regional financial impacts of this policy. A Tax Information and Impact Note (TIIN) has been published by HMRC, setting out the impact of the policy on the exchequer; the economic impacts of the policy; and the impacts on individuals, businesses, civil society organisations and equality impacts. The TIIN for the employer NICs changes was published on 13 November 2024.