Employers' Contributions: Charities

DCMS Ministers have met with representatives from the voluntary, community and social enterprise sector and are aware of their concerns about the National Insurance contributions (NICs) changes. We recognise the need to protect the smallest businesses and charities, which is why we have more than doubled the Employment Allowance to £10,500, meaning that more than half of businesses (including charities) with NICs liabilities will either gain or see no change next year.

We are 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 those under 21 and apprentices under 25, where eligible.

The government has taken a number of difficult decisions on tax, welfare, and spending to fix the public finances, fund public services, and restore economic stability. The need to raise income required the government to make this tough financial choice; the Chancellor was clear in her open letter to the voluntary sector that raising the rate of employer NICs was one of the most difficult decisions in the budget.

Within the tax system, we provide support to charities through a range of reliefs and exemptions, including reliefs for charitable giving. The tax reliefs available to charities are a vital element in supporting charitable causes across the UK, with more than £6 billion in charitable reliefs provided to charities and their donors. The biggest individual reliefs provided are Gift Aid at £1.6 billion and business rates relief at nearly £2.4 billion.