Around 125,000 businesses in the East of England could see their National Insurance Contributions (NICs) cut by up to £2,000 when the new Employment Allowance is introduced in April 2014.
Across the UK 1.25 million businesses and charities will benefit from the new allowance on employer NICs. In the East of England 44,000 will pay no employer NICs at all.
The allowance will mean that a business that employs one person on £22,400 will pay no employer NICs on that employee’s earnings. A business employing five adults full-time on the national minimum wage will see their employer NICs bill reduced by over 80 per cent.
Available every year, the allowance will be simple to claim and easy to administer. Businesses will confirm their eligibility for the allowance through their regular payroll processes and up to £2,000 will be deducted from their employer NICs liability over the course of the year.
Businesses paying NICs of £2,000 or less will pay no employer NICs at all. Over 90 per cent of the benefit of the new allowance will go to businesses with fewer than 50 employees.
Exchequer Secretary to the Treasury, David Gauke, said:
“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 125, 000 businesses in the East of England, and hundreds of thousands more across the UK that are ambitious to grow by reducing the cost of hiring their first employee or growing their workforce.”