Haverhill charity, Reach Community Projects, faced with £18,000 bill due to Government policy
A town charity faces an £18,000 bill as a result of Government changes to National Insurance.
Haverhill-based Reach Community Projects will see its National Insurance (NI) bill triple from next month, once the measures announced in November by Chancellor Rachel Reeves come into effect.
The changes were brought by the Government to fix public finances and fund investment into the NHS as well as increases in funding for contributory benefits such as the state pension.
But, for Reach, this means paying an extra £12,000 on top of its current contribution, bringing its total bill to £18,000.
Katie Chappell, head of fund-raising at Reach, said the announcements came as a shock as charities hoped to fall outside the new requirements.
She said: "[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.
"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."
Ms Reeves' changes included raising the NI rate paid by employers to 15 per cent, a 1.2 per cent hike, and reducing the threshold at which businesses are required to pay to £5,000, down from £9,100.
Alongside the announcements was an increase in the employment allowance, providing relief of up to £10,500 a year.
Cllr Joe Mason, representing Haverhill, said although the increase in relief was welcome, many would still be negatively impacted.
He said: "With limited budgets and rising costs, some charities may have to lay off staff or reduce services, diverting funds away from the vital services charities provide.
"We must do everything we can to help them continue their invaluable work, not make it harder for them to operate."
Ms Chappell said the extra bill could impact on whether the charity wanted to expand and potentially put its operations at risk.
She said: "At the moment we have to work really hard just to stand still — there is a lot of need out there, we are having to work really hard to meet that need.
"There are a lot of people out there who would just be finding life incredibly tough without our help."
Although known for its foodbank operations, Reach provides a range of prevention work, including free financial literacy in schools, homelessness support, and cookery classes for cheap, healthy meals.
Similar difficulties, Cllr Mason warned, will also be facing local businesses, putting struggling high streets at risk.
He said: "For businesses already dealing with rising costs, this additional financial pressure could lead to higher prices for customers or fewer local jobs —neither of which benefits our communities.
"Instead of being able to invest in new jobs or expand, many may well have to tighten their belts. I sincerely hope this won't provide a tipping point leading to closures."
