1.25 million small businesses to benefit from new employment allowance
The government has announced that as from April 2014, the National Insurance Contributions Bill will deliver a £2,000 a year tax cut for businesses and charities.
The new Employment Allowance, which will worth up to £2,000 is expected to benefit around 1.25 million small businesses – with approximately 450,000 being taken out of national insurance altogether – with more than 90% of the benefit expected to go to businesses employing less than 50 people.
This will also mean 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 National Insurance contributions at all.
Employers wishing to see the effect that savings will have can use the Government’s Employment Allowance calculator – for example, to see the effect on National Insurance Contributions bill of employing one additional person or looking at the reduction to current National Insurance Contributions payments. To view the calculator, click here.
H M Treasury have produced the following infographic to assist.