Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the increase in employer National Insurance contributions on the VCSE sector.

In order to repair the public finances and help raise the revenue required to increase funding for public services, the government has taken the difficult decision to increase employer National Insurance contributions (NICs).

A Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to employer NICs. The TIIN sets out the impact of the policy on the exchequer, the economic impacts of the policy, and the impacts on individuals, businesses, and civil society organisations as well as an overview of the equality impacts.

The Government has protected the smallest businesses and charities from the impact of the increase to Employer National Insurance by increasing the Employment Allowance from £5,000 to £10,500, which means that 865,000 employers will pay no NICs at all this year and more than half of employers will see no change or will gain overall from this package.

More broadly, within the tax system, we provide support to charities through a range of reliefs and exemptions, including reliefs for charitable giving, with more than £6 billion in charitable reliefs provided to charities, CASCs and their donors in 2023 to 2024.