‘Charity tax’ on lotteries will deny good causes £1 million a year, Reeves told

Britain’s 500 lottery fundraisers have new gambling levy could exacerbate problems caused by the national insurance hike

Chancellor Rachel Reeves is coming under more pressure over the so-called “charity tax” which will see the operators of Britain’s 500-strong charity lotteries forced to pay the new gambling levy aimed at the big bookmakers.

The sector is warning that it will take away £1 million from good causes.

The row has emerged as a number of charities, particularly hospices, have already warned about the impact of the increase in employers contributions to national insurance on their running costs after Ms Reeves refused to give them the same relief as the public sector on not having to pay it.

This morning health secretary Wes Streeting confirmed that hospices providing end of life care will be hit by the tax rise at a time when MPs are preparing to vote on legislation to allow terminally ill people to have assisted dying.

Culture Secretary Lisa Nandyis being asked to exclude charity lotteries from the gambling levy (Lucy North/PA) (PA Wire)

The hospice sector will be hit by the so-called charity tax on the 500 lotteries which raise money for social causes with the sector calling on Ms Reeves and culture secretary Lisa Nandy to rule out proceeding with plans to implement it on lottery fundraising. This new charge is expected as part of the anticipated mandatory gambling levy to fund research, education and treatment initiatives.

Ironically, Ms Reeves was criticised for not increasing the levy in her Budget.

Despite wide recognition of the unique position of charity lotteries in the gambling space - including their purpose as charity fundraisers and low-risk profile in comparison to commercial betting and gaming - the government plans to proceed with vastly increasing the amount the not-for-profit charity lottery sector will have to pay.

While categorically ruling out subjecting the National Lottery to the mandatory levy, Britain’s 500-strong charity lottery sector is being lined up to pay up to £1 million per annum as part of a levy. The levy is meant to ensure that high risk bookies and casinos pay their fair share to support problem gamblers.

Lotteries Council member, Local Hospice Lottery which raises funds for 40 hospices to the tune of £10 million a year, has highlighted how the charity tax would cost them the equivalent of 3,200 hours of visits to patients in their own homes.

They claimed that this currently saves money for the NHS by helping to prevent admissions to hospitals and supporting people in their preferred place of care at the time they need it most.

Lotteries Council chairman Tony Vick said: “It is hugely disappointing that the low-risk charity lottery sector is set to subsidise the sort of gambling harms generated by commercial betting and gaming companies via what amounts to little more than a charity tax on civil society.”

He added: “The situation is doubly unfair given that the government has ruled out subjecting the National Lottery to the new levy. As a sector of charity fundraisers, we call on the government to see sense and urgently confirm a zero-rating for charity lotteries and deliver parity between our 500 plus operators and the much larger National Lottery.”

Chair of Lotteries Council public affairs, Nick Cook added: “We hope that the Government will axe this planned Charity Tax without delay. While the charity lottery sector accepts that we must be included within the levy framework, we have highlighted clear precedents to allow us to be zero-rated, a move which would safeguard the future charitable return of our member lotteries.”

The Independent has approached the government for comment.