The impact of a planned increase in employer’s National Insurance (NI) Contributions has prompted a call from Third Sector Dumfries and Galloway (TSDG) to cap charity rates at the current level.
Chancellor Rachel Reeves said employers will pay NI at a rate of 15 per cent on salaries above £5,000 from April, up from 13.8 per cent on salaries above £9,100.
Alan Webb, TSDG’s Chief Executive Officer, has joined organisations such as SCVO and NCVO in highlighting the negative impact this would have on the sector.
In a letter to the Chancellor, he urged that she quickly provided assurance to a sector already facing financial difficulties.
He said: “With a backdrop of falling funding, lack of long-term investment and increasing demands on the sector for over a decade, its current vulnerability is simply unsustainable, and we must avoid placing any additional costs on the sector.
“Right now, I know our sector would appreciate a public commitment to protect third sector employers from increasing costs due to rising NI contributions, and risks that navigating other mitigation measures like employer’s allowance will not be enough.
“I suggest the simplest way to do so would be to cap charity employers’ rates at the current level and know this would be welcomed by third sector employers, not least the many who employ over 2000 people across Dumfries and Galloway.
“I urge you to act quickly to avoid charity employers taking immediate action on their staffing levels, in order to protect their organisations from more costs.”
In his letter, which was also sent to local MPs, the CEO also acknowledged investments in public services, support for carers, and debt recovery rate adjustments for those in receipt of Universal Credit.
His letter echoed one sent by SCVO chief Anna Fowlie who said the decision would have a “significant financial impact” on many voluntary sector employers.
“Commitments have been made to mitigate the increased NI costs for public sector employers, in recognition of the financial pressures they face, and the vital services they provide,” she said.
“While it is not yet clear exactly how this will work, particularly in Scotland, it is imperative that any concessions made also apply to voluntary organisations, in recognition of their financial situations and crucial role in society.”