In the run up to the introduction of the Employment Allowance – which will reduce every employer’s national insurance bill by £2,000 – HMRC has released new figures about how much the scheme could save UK businesses and charities.
The Government estimates that the tax cut will mean employers are nearly £5.5 billion better off per year by the end of Parliament in 2015. This is the equivalent of £200 per employee.
The savings come from three main areas:
1/ The new Employment Allowance taking effect from April this year
2/ The abolition of employer national insurance for employees under the age of 21 from April 2015
3/ Raising the threshold before a business starts paying national insurance for an employee in April 2014.
Visiting small businesses to mark the countdown to the introduction of the Employment Allowance, Chancellor George Osborne said:
“Small businesses make a vital contribution to our economy, creating jobs and stimulating growth. The ones I have visited today want to expand, take on new staff and make new investments so the actions we have taken to cut the jobs tax will be a real boost to them.
“Effectively providing cashback on jobs, the Employment Allowance will help these businesses achieve their goals and help the UK succeed in the global race."
So, some good news there....
Article from fellow Chamber of Commerce member "abi ltd of Farnham" 2014 Newsletter
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Just had to check the date - and it's not April 1st! I haven't had my letter yet, was it sent by post or on the HMRC website?
As we are now in the new TAX year, don't forget to claim.....Even easier if you have some one look after your payroll......
I also got a very similar letter from David Cameron as well (one up from George) :-)
Nice to see that they are keen for everyone to claim this.
I received my letter on Saturday (from Mr Cameron) - happy days!
And there was I thinking I was special Nick :-)
Haha!
Joking aside an extra £2k in the company bank accounts is very welcome.
Before anyone goes and books a holiday based upon this, you should be aware;
- it is not "cashback", but reduction in your payments to HMRC
- only applies to employers, ie you employ and pay staff (so Sole Traders themselves do not qualify)
- If you are a Ltd Company and you & any employees are 'paid' then I understand you do qualify
- Partnerships do not qualify (and I assume that includes LLP's)
Well, that's my understanding.
'Claiming' back should be simple if you use up to date payroll SW or a Payroll Bureau
Like most Government initiatives...the devil is in the small print
A nicely reduced Employer's NIC contribution payment to HMRC this month :-)
...and looks like it will fund a few more month's payments.
Now, where's the holiday brochure
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