Charities lobby government over National Insurance

One hospice says the National Insurance payouts will cost an extra £210,000 a year

Charities are lobbying the government to be exempt from National Insurance changes announced in the budget.

Oakhaven Hospice in Lymington, Hampshire, is among those calling for the exemption, which currently applies to the NHS and other public sector organisations.

Hospice operators have said they would struggle with the increase in employer's National Insurance contributions (NICs) and band changes.

They fear it will mean they have to limit the number of patients they are able to accept or make staff cuts.

Melville Kendal said the hospice has an ever-expanding patient base, but fears that may have to change

Oakhaven currently cares for an estimated 360 patients in the hospice and out in the community.

It employs 200 members of staff and the extra National Insurance costs will total £210,000 a year.

Melville Kendal, chairman of the board of trustees at Oakhaven Hospice, said that figure was the equivalent of four or five senior nurses.

He said: "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 fears the extra pressure of National Insurance costs would add pressure on fundraising for the organisation.

He continued: "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."

Debbie Moreton from charity Step by Step fears they will have to cut staff with the extra costs

Aldershot-based charity Step by Step works with vulnerable young adults and is calling for all charities delivering statutory services to be exempt from the National Insurance changes.

CEO Debbie Moreton said the change would cost them £66,000 a year and “two jobs could go”.

"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."

Hospices fear the extra National Insurance contributions will mean added pressure on the NHS

Elsewhere in Berkshire, Wokingham-based crisis charity The Cowshed, said they were "determined" to keep going.

Finance manager Anne-Marie Eden said they would see a 20% increase in NICs for their 15 employees.

She said: "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."

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Dr Nick Dando, acting CEO of Thames Hospice, said they were not expecting the "magnitude" of cost pressures announced and the extra NICs would cost them £300,000 a year.

He said: "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."

Chancellor Rachel Reeves announced the budget and despite concerns, the government has said it is standing firm National Insurance contributions

An open letter, organised by the National Council for Voluntary Organisations, has now been sent to the Treasury.

The letter has been signed by hundreds of charities including the NSPCC, Marie Curie, Mencap, all saying the increase will cause them to have to cut staff or limit services.

A spokesperson for HM Treasury said its tax regime for charities, including exemption from paying business rates, is "among the most generous of anywhere in the world".

"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."