Charities across Scotland are urgently appealing for support from both the UK and Scottish governments to prevent a collapse in essential services. Organizations such as hospices, homelessness charities, social care providers, and animal shelters have expressed concerns over the UK government’s plan to increase employers’ National Insurance contributions.
Speaking to BBC Scotland News, these charities emphasized they have “nowhere left to cut” and may be forced to reduce staff or even turn away patients from hospices. The UK Treasury maintains that its tax regime for charities is “among the most generous in the world,” while the Scottish government warns that the policy “risks hampering economic growth and damaging public services.”
Chancellor Rachel Reeves announced in her Budget that employer National Insurance contributions would rise from 13.8% to 15%, with the threshold for contributions lowered from £9,100 to £5,000. Although the employment allowance will increase from £5,000 to £10,500, charities have not received guarantees similar to those provided to public sector entities.
The Scottish Council for Voluntary Organisations estimates that the tax hike, effective from April, could cost the sector around £75 million. They told BBC Scotland News that this change “may be the straw that breaks the camel’s back.”
Rhona Baillie, CEO of the Prince and Princess of Wales Hospice, highlighted the impact on their operations: “The last thing we want to do is cut patient services or jobs. It would be an absolute last resort.” The hospice faces a potential deficit doubling to £1 million due to the tax increase and efforts to match NHS Scotland pay rises.
Neil Richardson, chief executive of Turning Point Scotland, described the situation as a “death knell for Scottish social care,” estimating an annual cost increase of £1.1 million due to the NI hike. He warned that without significant funding changes, they might need to cut staff and services.
These financial pressures trace back beyond the NI hike, with charities citing years of underfunding. The rapid implementation of the tax change has intensified these challenges, leaving organizations scrambling for solutions.
