‘Charity tax’ rise will hurt antisemitism fight, Rachel Reeves warned in latest Budget pushback

Labour chancellor told surprise rise in employers national insurance contributions will hit fight against antisemitism, after anti-Jewish hate incidents reached a record high in the first half of this year

The Jewish Leadership Council has hit out at the so-called “charity tax” measures in the Budget and has warned the chancellor that the tax hikes will damage the fight against antisemitism.

Extra costs from a shock rise in employers’ national insurance contributions will hit Jewish charities “fighting bravely” against a rise in antisemitism in Britain, they warn.

While ministers have spared the NHS and the public sector from the tax rise, they have refused to extend the exemption to charities and others.

Reports of antisemitic incidents in the UK reached a record high in the first half of this year. Between January and June, the Community Security Trust (CST) charity recorded 1,978 anti-Jewish hate incidents, up from 964 in the first half of 2023.

Rachel Reeves has been warned Jewish charities will be hit (EPA)

In a letter to The Independent, Claudia Mendoza, the chief executive of the Jewish Leadership Council, which represents the largest Jewish organisations in the UK, warns antisemitism “has risen to unprecedented levels since the attacks on Israel in October 2023”, when Hamas terrorists killed 1,200 people.

The tax hike will “damage the essential work done by Jewish charities” and lead to contractions “across the whole sector, including all those Jewish charities who are fighting bravely against antisemitism”.

She added: “Charities of all faiths – as well as secular charities – will be forced to reduce the support they can provide to their beneficiaries, given the charity sector as a whole faces an additional £1.4bn tax bill. The chancellor must urgently consider an exemption from this tax rise for the charity sector. Without this, the services provided by British charities will be reduced – in some cases critically.”

Keir Starmer has said his party has changed after it was engulfed by a series of antisemitism scandals under previous leader Jeremy Corbyn (PA)

Sir Keir Starmer has made much of “changing” the Labour Party after it was embroiled in a series of rows over antisemitism under its previous leader, Jeremy Corbyn. Last year he described it as an “evil” that had to be rooted out.

A Treasury spokesperson said: “Our tax regime for charities, including exemption from paying business rates, is among the most generous anywhere in the world, with tax reliefs for charities and their donors worth just over £6 billion for the tax year to April 2024.

“We have protected small charities and businesses by more than doubling the Employment Allowance to £10,500, meaning more than half of them with NICs (national insurance contributions) liabilities either gain or see no change next year. Charities will still be able to claim employer NICs reliefs where eligible and are still exempt from business rates."

Ms Reeves’ move to increase employer National Insurance is designed to raise more than £25bn which Labour says will be used to help fix the UK’s “broken” foundations.