Important Changes Affecting Your Group or Charity

13th November 2024

We take a look at recent and future developments likely to impact Glasgow charities and community groups.

The next few months will bring several financial and legal changes that may affect your organisation’s running costs and operations. These include some key points from the recent Budget that are causing concern for the voluntary sector.

Here’s a quick summary covering what we know so far and how we can all prepare:

Changes to Costs for Employers

Employer National Insurance Contributions

Does your organisation have paid employees? The UK Government has raised employer National Insurance contributions from 13.8% to 15% starting in April 2025, resulting in higher costs per employee.

Meanwhile, the income level at which employers start paying NI (the Secondary Threshold) will decrease from £9,100 to £5,000. This change will take effect until April 2028, after which the threshold may increase in line with the consumer price index (CPI).

Estimates by the IFS have outlined the potential additional costs per employee:

On minimum wage, £22,000 per annum, full time = £770 rise in Employer NICs per employee.
On median wage, £32,000 per annum, full time = £900 rise in Employer NICs per employee.

We will also see changes to the National Living (Minimum) Wage, which will increase to £12.21 per hour, whilst the real Living Wage (a voluntary rate) is set to increase to £12.60 an hour from next year.

We have consistently championed Fair Work and Fair Pay for the sector, but there are real concerns that these changes will directly affect charity and community organisations in an already challenging operating environment.

Will everyone be worse off? There is some good news in the Budget.

NI liabilities could be fully or partially offset by an increase in Employment Allowance (EA) from £5,000 to £10,500. More organisations will also be eligible for EA after the Chancellor removed the qualification threshold of £100,000. The Government estimates that 865,000 businesses will pay no NICs at all, and more than half of employers will either see no change or be better off.

Practical Help and Advice

The prospect of additional costs at a time when our sector is facing multiple challenges is worrying, but we’re here to offer you practical advice and support to help you plan ahead:

Become a member – Connect with others facing similar challenges through networking and events and benefit from further discounts and additional services.

Access free support if you operate in Glasgow – This includes advice and guidance on governance, funding and fundraising, HR and health & safety, signposting to additional support and resources, and free or low-cost training and workshops for your board and staff.

Subscribe and save – Our finance and payroll services can help you reduce costs. We also offer professional HR advice from our experienced team to assist with difficult decisions, including redundancies.

What Else is Changing?

Developments in Charity Law

The Charities (Regulation and Administration) (Scotland) Act 2023 came into effect on 1 April 2024 with initial changes including new and enhanced powers for OSCR the charity regulator in Scotland.

The second phase will include the commencement of the public register of charity trustees and changes to the disqualification criteria for trustees. As well as expanding the range of offences that disqualify people from being a trustee, the new rules will now also be applied to staff or volunteers undertaking senior management functions within a charity. It is important that charities consider if and how these new rules will impact their governance as existing staff or Trustees may be subject to automatic disqualification when the changes come into effect.

The TSI Learning Portal offers trustee training, including governance and other subjects that are crucial for charities and community groups.

Disclosure and Safeguarding Changes

A number of changes are being made to the Disclosure/PVG scheme over the next couple of years.

New referral powers for local authorities and Integration Joint Boards were introduced in September. Decisions on the future fee arrangements at Disclosure Scotland are expected from February 2025, subject to parliamentary timetabling. The most significant changes will be from 1 April 2025 when types and levels of disclosure will change – regulated work will become regulated roles and will be mandatory for those working with children or protected adults. These changes mean that positions previously not eligible to join the PVG scheme may now be legally required to join. Together with the proposed increase in fees, it could mean an additional financial burden for our sector.

Read more in an overview from Disclosure Scotland, and watch out for information and future training, which we will share in our regular bulletin.

Keep in touch!

Have you been impacted by changes announced to National Insurance contributions, welfare reform, and NHS support? What do you believe was missing from the Autumn Budget announcement, and what, if anything, can we do to help? Please get in touch if you have ideas, suggestions or helpful links you can share with others.

We are writing to local MPs/MSPs and working with our partners to champion the sector and provide whatever support we can. We will also continue to share advice, resources and relevant training through our website and newsletter.

Relevant Links

31 October 2024

Information Sessions on Charity Law and PVG Changes

OSCR is collaborating with local TSIs to highlight upcoming changes in charity law, including sessions on:

Volunteer Scotland is also offering regular information sessions to learn more about changes to the Disclosure Act.

Employability providers: Understanding the potential impact of increased National Insurance (NI)

A short survey has been designed to help the National Third Sector Employability Forum (TSEF) Executive Group understand the potential impact of increased National Insurance (NI) payments on third-sector employability service delivery and budgets in Scotland.

If this applies to you, please complete the survey before 29th November. We will share the results with local employability partners and with the Scottish government, given the First Minister’s recent statement on this issue.

Read the Government’s Summary of the 2024 Autumn Budget here