Higher employer NICs & National Living Wage increase will ‘severely impact’ charity shops
Melanie May | 3 December 2024 | News
Charity retailers expect to be significantly impacted by the increase to employer NICs combined with a rise in the National Living Wage, according to the Charity Retail Association.
Reducing paid staff and hours, closing shops and putting up prices were all likely outcomes, its survey of 52 charity retailers found with only 8% expecting to take no action.
Advertisement
Asked about the likely impact, respondents said that they expect to:
- Reduce paid staff (36% of respondents)
- Reduce paid hours (35%)
- Reduce trading hours (21%)
- Close shops (27%)
- Scale back plans to open new shops (38%)
- Put up prices (67%)
- No action (8%)
Charity Retail Association Chief Executive Robin Osterley said:
“We are of course aware that the Government is facing some extremely difficult choices, but it seems a shame that raising money by impacting charities, and specifically charity shops, should be part of their thinking. Our survey shows that charity shops, which form such a hugely important part of the circular economy and which provide an invaluable source of inexpensive goods for hard-pressed households, will be severely impacted by these changes, and we are calling on the Government to take steps to mitigate this.
“The national insurance increase will cost a typical charity shop around £1,000 each year – some of this cost will be recouped through higher prices but ultimately the result will be less money raised to support charitable services.”
Employer NICs are set to rise in April from 13.7% to 15% – a change that will cost the sector an estimated £1.4bn. Also in April, the National Living Wage will increase. For over 21s, it will rise by 6.7%, from £11.44 to £12.21, while for 18 to 20-year-olds, the minimum wage will rise from £8.60 to £10.
The Chancellor Rachel Reeves recently ruled out exempting or reimbursing charities impacted by the upcoming increases to NICs. This followed a letter sent by the NCVO and ACEVO, and co-signed by over 7,300 charities and voluntary organisations, that set out the impact and urged Reeves to commit to reimbursing voluntary organisations’ increased employer NICs, as for the public sector.
Related posts
Barnardo’s sees significant rise in shop profits & Gift Aid capture with Cybertill
Strong Q1 for charity retailers as sales rise 6.2%, figures show
History of the charity shop to feature on BBC’s Celebrity Mastermind
Online shoppers provide boost as charity shop sales grow
About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.