Autumn Budget 2024 - significant increase in charities' staffing costs
The new Government's first budget, announced on 30 October 2024, includes measures increasing employer National Insurance Contributions (NICs) and the National Living Wage, adding to the financial pressures on charities.
With effect from April 2025:
- Employer NICS will increase to 15% on salaries above £5,000 (up from 13.8% on salaries above £9,100)
- The National Living Wage (for workers 21 and over) will rise from £11.44 to £12.21 per hour, whilst the National Minimum Wage will rise from £8.60 to £10
There will of course be common support for paying workers a fair wage.
It is undoubtedly true, though, that these measures will only add to the financial and operational pressures already felt throughout the charity sector.
NCVO and ACEVO have written an open letter to the Chancellor Rachel Reeves urging her "to reimburse charities for [the increased NICs] costs, as she has committed to do for public sector organisations".
With the difficult circumstances charities are facing, trustees may find it helpful to consult the Charity Commission's guidance CC12 on charity finances.
Trustees will also need to be mindful of the various duties they must comply with, including to protect the charity's assets, to manage the charity’s resources responsibly, to act in its best interests and to act with reasonable care and skill.
For more information, please contact Shiavji Shiva in our Charities team on 0121 227 3724 or complete the form below.