MPs seek amendments on NICs Bill to mitigate impact on charities

Melanie May | 17 December 2024 | News

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Labour’s NICs Bill receives its third reading in Parliament today, with MPs from a number of parties putting forward amendments with the aim of mitigating the impact of the proposed rise on charities.

The National Insurance Contributions (Secondary Class 1 Contributions) Bill (Amendment Paper) includes proposed amendments from MPs including Daisy Cooper (Lib Dem), Gareth Davies (Conservative), Sorcha Eastwood (Alliance Party), Dave Doogan (SNP), and Shockat Adam (Independent).

Among the amendments in the paper, those put forward by the MPs seek to keep charities paying employer NICs contributions at the current rate. MPs are also seeking to mitigate the impact on other organisations including care providers, NHS dentists, GPs and pharmacists, and education providers such as universities.

Until 5 April, the rate is 13.8%, with the government planning to increase this to 15%: a change that is estimated will cost the sector £1.4bn. At the same time, the level at which employers become liable to pay national insurance on each employee’s salary (the Secondary Threshold) will reduce from £9,100 per year to £5,000 per year. The changes were announced by Chancellor Rachel Reeves in the October budget.

The proposed changes have been roundly criticised for the impact they will have on the sector. This was set out in a letter to Reeves by ACEVO and NCVO and co-signed by more than 7,300 charities and voluntary organisations, and urging the Chancellor to commit to reimbursing voluntary organisations’ increased employer NICs. Reeves has so far ruled out reimbursement or exemption.  The Charity Retail Association and the Voluntary Organisations Disability Group have both also spoken out about the impact.

Update – 18 December

The bill was read for the third time on 17 December, and passed without amendments, although there was some support for the proposed amendments from opposition MPs. It is still to be debated in the House of Lords.

About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.