Non-trading charities will not get national insurance holiday

Concession will apply only to those that trade, says Treasury minister Lord Sassoon

National insurance
National insurance

Charities set up during the next three years will not benefit from the contribution holidays on employers’ national insurance that are available to new businesses, peers have been told.

Since September last year, new businesses set up outside London, the south-east and the east of England have not had to pay national insurance of up to £5,000 on each of the first 10 employees they hire in their first year of business.

It means they can save up to £50,000 in NICs. But access to the holiday is not available to charities that do not trade.

A number of peers, including Lord Myners and the Archbishop of York, asked Lord Sassoon, commercial secretary to the Treasury, why this was the case during the second reading in the Lords of the National Insurance Contributions Bill 2010-11.

Sassoon confirmed that non-trading charities were excluded from the payment holiday.

"It would be wrong to say that all charities are excluded, but I accept that non-trading charities are," he said. "If they had been included, it would have complicated the scheme and created complexity."

Sassoon said he expected very few non-trading charities to be set up during that period.

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