Charities facing National Insurance hike have ‘nowhere left to cut’

The Scottish Council for Voluntary Organisations has called on the UK government to abandon the NI increase. Failing that, it says the Scottish government should fully fund the additional costs for charities.

First Minister John Swinney has urged the Treasury to cover the costs.

His government will set out what financial support it aims to provide to charities in its Budget, to be announced on Wednesday.

Finance Secretary Shona Robison: “This UK government policy risks hampering economic growth and damaging public services and whilst discussions with the Treasury are ongoing, we still do not have certainty ahead of the Scottish Budget.”

In response to an appeal from the National Council for Voluntary Organisations, Chancellor Rachel Reeves said, external she recognised the “important role” of charities, but stopped short of offering compensation for the tax hike.

She says the measure will raise £25bn and means direct taxes on workers can be avoided.

The Treasury has said its tax regime for charities is “among the most generous of anywhere in the world”, with the autumn Budget delivering just over £6bn of tax relief for organisations and donors this financial year.

A spokesperson said the increased employment allowance will protect charities, meaning more than half of them with NI liabilities “either gain or see no change next year”.