Asked by: Al Pinkerton (Liberal Democrat - Surrey Heath)
Question to the Department for Digital, Culture, Media & Sport:
To ask the Secretary of State for Culture, Media and Sport, what assessment she has made of the potential impact of the proposed increase in employers' National Insurance contributions on not-for-profit organisations.
Answered by Stephanie Peacock - Parliamentary Under Secretary of State (Department for Culture, Media and Sport)
At the recent Budget, the government took a number of difficult decisions on tax, welfare, and spending to fix the foundations on public finances, fund public services, and restore economic stability.
Ministers have met with representatives from the voluntary, community and social enterprise (VCSE) sector to discuss this issue and the department is aware of their concerns about the impacts of the increase to employer National Insurance Contributions (NICs).
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.
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.
The Government publishes Tax Information and Impact Notes (TIINs) for tax policy changes, which give a clear explanation of the policy objective and an assessment of the impacts. The TIIN for the employer NICs changes was published on 13 November 2024.
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.