Peers have voted to exempt small charities from a hike in National Insurance contributions being brought in by the Labour government.

In a House of Lords debate on the government’s National Insurance Contributions (Secondary Class 1 Contributions) Bill this week peers backed an amendment put forward by Conservative peer Baroness Neville Rolfe to exempt charities with an annual revenue of less than £1m.

Challenges facing charities due to the hike include losing jobs and skills, said Neville-Rolf during the debate.

“These organisations and others are facing a financial cliff edge in April and that is thanks to the government, she said, adding it is “hospices, charities, healthcare providers, early years settings and small businesses that will pay the price”.

She hoped the government would accept the amendment and “will listen to the experts, the GPs, the hospices and the charities, which are all telling us that the Government must think again”.

Her amendment was backed by 235 peers, with 149 against.

A previous attempt in parliament to exempt or reduce the impact of the National Insurance rise for charities failed last year.

MPs including Lib Dem leader Ed Davey and Green Party leaders Carla Denya and Adrian Ramsay introduced amendments to the government’s national insurance contributions bill in December.

But these were not backed by most MPs and the bill was passed at its third reading stage in the House of Commons.

In January further concerns were raised, from Conservative, Liberal Democrat and Labour MPs over a failure by government to include an exemption for charities of all sizes in the bill.

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