New Employment Allowance ‘to benefit 1.25 million small businesses’

15 Oct 2013

A new Employment Allowance worth up to £2,000 will benefit  some 1.25 million small businesses, while 450,000 firms will be taken out of  national insurance altogether, the Prime Minister David Cameron has announced.

The Government expects that more than 90% of the benefit of  the allowance will go to small businesses with fewer than 50 employees.

Speaking to business leaders in the east of England, Mr  Cameron said: ‘Small business and entrepreneurs are the lifeblood of our  economy and this Government is firmly on their side.’

Announced in the 2013 Budget, the Employment Allowance will  give businesses and charities a £2,000 tax cut off their National Insurance  Contributions (NICs) bill over the course of the year’s PAYE payments.

The new allowance comes into force in April 2014 and employers  will need to confirm their eligibility through their regular payroll process.

The tax cut was applauded by the Federation of Small  Businesses (FSB). ‘The NICs Employment Allowance is a measure our members have  warmly welcomed,’ commented FSB National Chairman, John Allan.

‘It will have a positive impact on small firms and the  economy when it comes into force next spring. Our members have said they’ll  spend the savings on their business, either through investing in the business,  increasing wages or taking on staff.’

Draft legislation is included in the National Insurance  Contributions Bill, which was introduced to the House of Commons earlier this  week.

The Government has  set up an online tool to allow employers to see the effect of the tax cut.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s