Sector leaders call for urgent clarification on whether voluntary organisations will be hit

Charity leaders are asking the UK chancellor not to impose employer National Insurance (NI) increases on the sector.

It is widely expected that Rachel Reeves will announce the NI hike in Wednesday’s budget.

It is thought that the rise in employer contributions will mainly fall on the private sector, with public sector employers being reimbursed in an attempt to prevent cuts to public services.

However, and as so often in the past, the voluntary sector has been left in limbo and does not know where it stands.

Leaders fear that an employer NI hike on charities would impact the on-going running costs crisis, which is pushing many organisations to the brink, while also effecting the delivery of vital public services.

A letter has been sent to Reeves, authored by Scottish Council for Voluntary Organisations’ chief executive Anna Fowlie.

It has also been signed by leaders from the rest of the UK, Celine McStravick of NICVA, Lindsay Cordery-Bruce of WCVA and Sarah Elliott of NCVO.

The letter states: “We are writing to you on behalf of charities and community organisations across the UK, in relation to recent reports of plans to increases to employer National Insurance contributions and the potential impact this could have on the voluntary sector.   

“If reports in the media are correct, National Insurance contributions are to be increased in the private sector. Public sector employers will be reimbursed for any such increase, to protect public services. But there has been no mention of the voluntary sector. This comes as a disappointment, given that our sector provides essential public services to people and communities up and down the country, delivering significant savings to the public purse.  

“With costs climbing, funding falling, and demand for services increasing, our sector already faces a crisis. The additional costs placed on the sector by increasing employers’ National Insurance contributions will only compound this.  

“As you navigate the significant financial challenges the country faces, we are confident that it would not be your intention to place them at the door of charities and community organisations. We are not asking for special treatment, just parity with the public sector.  

“In the spirit of partnership - as outlined in the UK Government’s Covenant document which published last week – we are assuming this is an oversight or over-simplification by the media and we are therefore calling on you to urgently clarify this matter, confirming that no additional financial burden will be placed on our sector.

“We look forward to receiving a response as a matter of urgency.”

A spokesperson for HM Treasury said: “We do not comment on speculation around tax changes outside of fiscal events."