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More on new employment allowance

by Tax Faculty Team on 22.03.2013 17:51

Help your clients get £2,000 off their NIC bills next year

As explained in our earlier news item, the new Employment Allowance was announced in the Budget.

While we only have an outline of how it might work at the moment, we understand that UK businesses and charities will be able to apply for up to £2,000 off their employers’ NIC bill in April 2014 which should be a useful boost to small and growing businesses and charities.

It may also help them take on new staff. Unlike the National Insurance holiday which was regional, this will apply to all businesses and charities regardless of age, size or location from April 2014.

The Employment Allowance will be delivered through standard payroll software and HMRC’s Real-Time Information system. Employers will only need to confirm their eligibility through their regular payroll processes and the £2,000 will be deducted from their employer NICs liability, starting with the first payroll after April 2014, until it is used up.

To help explain how the Employment Allowance will work, the Treasury has created a mini-website and online calculator to illustrate the effect of the allowance. Please post your comments about the online calculator and thoughts on how the scheme can be made as simple as possible, below.

If all our members tell all their clients about this, over 1.5m businesses – a third of all UK businesses - could take advantage of this benefit.