Charities tonight warned they face ‘dire’ consequences following a £1.4billion Budget raid.
Bosses said they will be forced to axe services, lay off staff or even shut down as a result of Labour’s tax bombshell.
They urged Chancellor Rachel Reeves to spare them from her £25billion hike in employers’ National Insurance.
But the Treasury said there would be no exemption for charity employees – even if they are working with public sector services which will not face an increase.
Markets remained spooked by the Halloween ‘maxi-Budget’ yesterday as borrowing costs rose and the pound plummeted.
Charities have urged Chancellor Rachel Reeves to spare them from her £25billion hike in employers’ National Insurance
Chief executive Sarah Elliott said many charities were already in a ‘dire situation’ as a result of the cost-of-living crisis, which has hit their own costs and dented fundraising (stock image)
The Treasury said there would be no exemption for charity employees – even if they are working with public sector services which will not face an increase
Groups representing the elderly and terminally ill patients led warnings about the ‘detrimental impact’ following the most Left-wing Budget in decades.
In Wednesday’s Budget the Chancellor not only increased the rate of employers’ National Insurance but also slashed the salary threshold at which it is paid – meaning more part-time workers will also be caught. The voluntary sector employs around one million people, including many part-time staff.
The National Council for Voluntary Organisations (NCVO) tonight warned the jobs tax hike would deliver a devastating £1.4billion-a-year blow.
Chief executive Sarah Elliott said many charities were already in a ‘dire situation’ as a result of the cost-of-living crisis, which has hit their own costs and dented fundraising.
In a joint letter to the Chancellor with Jane Ide, of the Association of Chief Executives of Voluntary Organisations, she said the move not to exempt the sector ‘will place a major strain on charities at a time when we are already struggling’.
They added: ‘Our sector will have less flexibility than ever before to absorb these increasing costs. Many of us will have to make difficult choices in the coming months as a result. The harsh reality is that many organisations may be forced to reduce staff, cut salaries and, most importantly, scale back services for the very people they strive to support.’
The NCVO last night called for others to support its letter in a bid to change the Chancellor’s mind over the ‘devastating impact on the charity and voluntary sector’.
Last night the RSPCA also said it was facing an additional tax bill of more than £1million a year as a direct result of Ms Reeves’ tax plans.
In Wednesday’s Budget the Chancellor not only increased the rate of employers’ National Insurance but also slashed the salary threshold at which it is paid – meaning more part-time workers will also be caught
Chief executive Chris Sherwood said: ‘We’re really concerned at the impact these NI rises will have for animal welfare. Failure to provide exemptions or allowances for charities… risks placing additional pressure on what is already a challenging financial backdrop for so many charities; and could end up costing the taxpayer more if charitable services are cut.’
Age UK said the move could ‘reduce our capacity to support the older people who badly need us’.
End-of-life charity Marie Curie also said the measure would have ‘a detrimental impact on the amount of care we are able to provide’.
Chief executive Matthew Reed said it made no sense to levy the tax hike on nurses who are delivering hospice services on behalf of the NHS.
Saying he was ‘shocked’ by the outcome of the Budget, he said the increases on not-for-profit organisations ‘can only serve to put services we deliver on behalf of the NHS under further pressure’.