Vulnerable beneficiaries are being left without essential support as charities across the UK are forced to scale back services or halt expansion plans due to surging operational costs, according to leading audit, tax and business advisory firm Blick Rothenberg.
The warning comes amid growing concern that increased National Insurance Contributions (NICs) and the rising National Minimum Wage (NMW) are placing an unsustainable financial burden on third-sector organisations — many of which are already operating on tight budgets.
“The effective rate of NIC that charities must pay has risen to 18% for many,” said Mark Hart, Audit, Accounting & Outsourcing Partner at Blick Rothenberg. “A charity with a £1 million salary bill would now face an additional £32,000 in NIC costs.”
To illustrate the financial strain, Hart noted that while the London Marathon raised £73 million in 2024, it would have needed to raise an extra £2.2 million just to offset increased NIC costs under the new rate and threshold.
Hart said several of his charity clients have already begun cutting back services or freezing plans to grow, directly harming those they support.
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