Charity shops to be “severely impacted” by hike in employer National Insurance Contributions

News

A survey undertaken by The Charity Retail Association (CRA), the UK’s trade association for charity shops, has shown that the impact of the increase in employers’ National Insurance contributions combined with increases to the National Living Wage, will be significant.

Over a third of respondents said that they would have to reduce paid staff and/or reduce the hours that staff work. Slightly over a quarter said that they would have to close shops, and two-thirds said they would have to put up prices. The full survey was as follows:

Q: As a result of the forthcoming increases in the National Living Wage and the increase in employers’ National Insurance Contributions, what is likely to be the impact?

A: We will be likely to:

Reduce paid staff (36% of respondents mentioned this)
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%)

CRA 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.”