Policy

Making it easier to set up and grow a business

Supporting detail:

Taking tax off jobs for small businesses

Since April 2014 every business and charity in the UK is entitled to a £2,000 Employment Allowance to reduce their employer National Insurance contributions (NICs) bill each year.

The Employment Allowance will reduce the barriers faced by small businesses which aspire to grow by supporting businesses with the costs of employment.

Up to 1.25 million employers will benefit, with 98% of the benefit going to small businesses with fewer than 250 employees. As a result, 450,000 small employers will pay no NICs at all in 2014 to 2015.

The allowance is available to businesses, charities and Community Amateur Sports Clubs. It is a simple process for businesses, for which they only need to confirm their eligibility through their usual payroll process. It is delivered through standard payroll software and HM Revenue and Customs’ Real-Time Information system.