Employers can save £2000 a year

By | 16 October, 2013

A new bill is going through the parliamentary process which will save employers £2000 a year in Employers National Insurance contributions.  This represents a help to the smaller businesses and should work as an incentive for smaller businesses to take on staff without the initial burden of Employers National Insurance.

In a letter from MP David Gauke, all employers will be able to take part and HMRC will deduct the first £2K from their bill over the course of the tax year using a new Employment Allowance.  This is to take effect from 6th April 2014 and will be operated as part of the normal Payroll RTI processes.

David Gauke says “The Government believes that small businesses are the lifeblood of our economy and we want to do what we can to support them.  The Employment Allowance will reduce the cost of taking on new staff, supporting small businesses that have an ambition to grow by hiring their first employee or expanding their workforce.”  Up to a third of employers will pay no Employer NIC at all.

We do not have the exact details yet of how this will work in practice but you can read more on an HMRC satellite website www.employmentallowance.com

 

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