Haverhill charity faces £18k bill due to National Insurance rise

A charity is facing an £18,000 bill next month as changes to National Insurance contributions come into effect.

Reach Community Projects, based in Haverhill, Suffolk, will pay an extra £12,000 on top of its current contributions.

It comes after Chancellor Rachel Reeves announced in her autumn Budget she would increase the National Insurance (NI) rate for employers to boost funding for public services including the NHS.

Head of fundraising at Reach, Katie Chappell, said the announcement was a shock as charities hoped to be exempt.

“[Charities] are all in the same boat, everyone is finding it tough, everyone is surprised, everyone is disappointed, and everyone is struggling to find funds,” she told the Local Democracy Reporting Service.

“It’s tough anyway being a charity right now, we are grateful for every single penny we get, but it is hard to get every single penny – it’s going to be tough on us.”

Although known for its foodbank operations, Reach also provides free financial advice in schools, homelessness support and cookery classes for cheap, healthy meals.

Ms Chappell said the extra bill could impact on whether the charity wanted to expand and potentially put its operations at risk.

“There are a lot of people out there who would just be finding life incredibly tough without our help,” she added.

Reeves’ changes included raising the NI rate paid by employers to 15%, a 1.2% hike, and reducing the threshold at which businesses are required to pay to £5,000, down from £9,100.

Alongside her announcement was an increase in the employment allowance, providing relief of up to £10,500 a year.

Joe Mason, Conservative county councillor for Haverhill, said although the relief was welcomed, many charities would still be negatively affected.

“We must do everything we can to help them continue their invaluable work, not make it harder for them to operate,” he added.

He also believed local businesses would also struggle with the higher rates.

The Treasury has been approached for comment.