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£2000 employment allowance to boost business

 

Posted on 29 October 2013

From April 2014, every business, charity and CASC will be entitled to an annual “employment allowance” of £2,000 to reduce their liability for Class 1 secondary National Insurance Contributions (NICs).

The National Insurance Contributions Bill 2013-14, which contains legislation for the said allowance, was presented to Parliament on 14 October 2013.

The allowance is expected to benefit up to 1.25 million businesses and result in around one third of all employers being taken out of paying NICs altogether. Over 90% of the benefit of this allowance will go to small businesses with fewer than 50 employees, and means that businesses will be able to employ four adults or ten 18-20 year-olds full-time on the National Minimum Wage without paying any employer NICs at all.

Prime Minister David Cameron said:

‘Small business and entrepreneurs are the lifeblood of our economy and this government is firmly on their side. An ambitious and thriving small business sector is vital for steering the economic recovery in the right direction and helping us to succeed in the global race.

[the employment allowance] is another example of the action that this government is taking to back small businesses and help people get on.’

For more information, get in touch with one of our Tax experts here

 

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