MPs reject bid to protect charities from National Insurance increase

MPs have rejected amendments to the government’s national insurance contributions bill that would have reduced the impact of employer contribution increases on charities.

The amendments were put forward by MPs, including Lib Dem leader Ed Davey and Green Party leaders Carla Denya and Adrian Ramsay.

They proposed shielding charities, hospices, GP practices and early years nurseries from the increases as employers.

But the changes were not backed by most MPs and the bill was passed without them at its third reading stage.

During a debate in parliament on the bill Lib Dem deputy leader Daisy Cooper said the increases “will undermine the effort to put more investment upstream, and that it will force many charities to do even more fundraising to backfill the gap created by the national insurance contributions hike”.

Another MP who had also wanted to see the bill amended is SNP’s Dave Doogan, who said the increases will have a “brutal impact” on healthcare charities, who are “warning that deep cuts will be made to the services they provide”.

He added: “As I and many Members have said, when charities fold, as many of them will, the services that they were providing will no longer be there. Who will then provide that care?”.

In backing the bill, the government’s exchequer secretary James Murray MP said: “The measure will protect small businesses and charities by more than doubling the employment allowance from £5,000 to £10,500 pounds a year from April 2025.

“In addition, the £100,000 eligibility threshold will be removed. Through the measures in the Bill and others in the Budget, the government are taking the difficult but necessary decisions to fix the foundations of our economy.”

Three in five disability charities say NI increases, coupled with a rise in the minimum wage, would plunge them into financial deficit, according to a survey carried out by the Voluntary Organisations Disability Group.

One in three said they will have to hand back local council contracts as they will no longer be able to fulfil them, revealed the survey findings that were published this month.