Charities Seek Exemption from National Insurance Revisions

Charitable organizations are urging the government to grant them an exemption from the National Insurance modifications announced in the recent budget. Oakhaven Hospice, located in Lymington, Hampshire, is among the entities advocating for this exemption, which is currently extended to the NHS and other public sector bodies. Hospice providers have indicated that they would face difficulties coping with the increase in employer’s National Insurance contributions (NICs) and adjustments to contribution bands. They express concern that this could necessitate limiting the number of patients they can admit or implementing staff reductions. Oakhaven presently offers care for an estimated 360 patients, both within its facility and in the wider community. The hospice employs 200 staff members, and the additional annual National Insurance expenses are projected to total £210,000. Melville Kendal, chairman of the board of trustees at Oakhaven Hospice, stated that this sum is equivalent to the cost of four or five senior nurses. He commented: “This is of no benefit to the patients, the staff, the community and of course all our work is with NHS patients, we are intertwined with the NHS – so the more we are hindered, the more it presses stress on the NHS itself.” Mr. Kendal expressed apprehension that the added burden of National Insurance costs would intensify fundraising challenges for the organization. He further added: “There’s only so much you can ask of the community, they’ve been very generous in the past.”The hospice will continue, but we’ve got an ever-expanding patient base and we may have to limit the amount of people we can take.” Step by Step, an Aldershot-based charity assisting vulnerable young adults, is advocating for all charities that deliver statutory services to be exempt from the National Insurance changes. CEO Debbie Moreton indicated that this alteration would incur an annual cost of £66,000 for their organization and that “two jobs could go”. She further stated: “It will impact the frontline services that young people really do need,” she said.”They desperately need those support workers, fundraising is very tight as well, lots of people do not have disposable income to donate to any charity so we will find in a couple of years time there’s going to be an impact, services will close.” Elsewhere in Berkshire, The Cowshed, a crisis charity situated in Wokingham, affirmed its “determined” resolve to continue operations. Anne-Marie Eden, the finance manager, reported that their 15 employees would experience a 20% rise in NICs. She commented: “We’re constantly trying to fundraise from one month to the next, applying for grants, so yes, it’s hard to take and it will impact us.”We anticipate the next six months could be extremely difficult because of the impact of this increase across small companies. “A lot of the businesses may not be able to retain the workforce they’ve got and people may become unemployed.” Dr. Nick Dando, interim CEO of Thames Hospice, stated that the “magnitude” of the announced cost pressures was unforeseen, and the additional NICs would amount to £300,000 annually for their organization. He remarked: “We will need to work with, I hope, both government and our local NHS to explore how we can increase the proportion of funding we receive from the NHS to help deliver this essential, vital care. “We’ve also set ourselves ambitious, but achievable, income targets in terms of fundraising and in the retail space. “However, there is a volatility in the charitable donations and whilst we can set targets we can’t guarantee we’ll realise them, so it does create uncertainty.” A collective letter, coordinated by the National Council for Voluntary Organisations, has been dispatched to the Treasury. This correspondence bears the signatures of hundreds of charities, including the NSPCC, Marie Curie, and Mencap, all asserting that the rise will necessitate either personnel reductions or service restrictions. A representative for HM Treasury commented that its fiscal framework for charitable organizations, which includes relief from business rates, is considered “among the most generous of anywhere in the world”. They added: “We have protected small charities and businesses by more than doubling the Employment Allowance to £10,500, meaning more than half of them with NICs liabilities either gain or see no change next year,” they said.”Charities will still be able to claim employer NICs reliefs including where eligible and are still exempt from business rates.”