Two months to go until businesses can claim £2k cashback on jobs
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Chancellor visits Yorkshire businesses as HMRC publishes new Employment Allowance guidance
With only two months to go until the introduction of the Employment Allowance, HM Revenue & Customs (HMRC) has published new guidance for businesses, setting out more details on eligibility and how to claim the allowance.
The forthcoming allowance is worth up to £2,000 off the employer National Insurance Contributions (NICs) bill for 1.25million businesses across the UK. Available from 6 April 2014, it will see 450,000 businesses stop paying NICs altogether.
With 90% of the benefit going to small businesses employing fewer than 50 people, Chancellor George Osborne visited small businesses in Halifax and Keighley, Yorkshire, to tell them about the £2,000 cashback on jobs and find out how they will put it to work.
At Dean Clough Mills in Halifax, once the world’s largest carpet factory and now home to approximately 150 businesses, he saw apprentice chefs in action at The Cooking School – the UK’s best small Cookery School 2013 – which as well as offering cooking lessons, runs an apprenticeship programme and charitable food education programme. While there, he also took questions from a number of small businesses.
The Chancellor also visited Advanced Actuators, a supplier of actuators (valves) to the gas, oil, power, water and nuclear industries around the world. Whilst there, he was able to see the hydraulics equipment the company designs, makes and exports and learned that the company has just won a £300,000 contract to export to China.
He then visited Cobbles and Clay, a local art cafe on Haworth’s high street where he met with the owner and saw the crockery they make. The cafe also offers pottery painting.
Discussing the benefits the allowance will bring, George Osborne said:
‘In exactly two months, businesses across Britain will start benefiting from a cashback on jobs. Worth up to £2,000, every business in the country will see a cut in their National Insurance bill thanks to the Employment Allowance.
This new tax cut is part of our long term economic plan to back businesses investing in jobs. That is how you deliver greater economic security for hardworking people.
John Allan, National Chairman of the Federation of Small Businesses (FSB) added: :
According to FSB research, small businesses will use the Employment Allowance to boost staff wages (29%), employ additional staff (28%) and invest in resources (24%).
The FSB called for help so that firms could take on more staff and this scheme means many won’t pay any NICs at all. Compared with a year ago, small businesses are employing more staff and are looking to expand in the near future. This points to growing confidence from the UK’s small firms.
The new HMRC guidance provides businesses with additional information about how to claim the allowance which will be a simple process done through their payroll providers. It also sets out more detail on the types of businesses that will be able to benefit.