National Insurance: £2,000 employment allowance
In the 2013 Budget, the Chancellor announced the introduction of an allowance of £2,000 per year for all businesses and charities to be offset against their employer Class 1 secondary NICs bill from April 2014. The allowance will be claimed as part of the normal payroll process through RTI.
The Government has consulted on the details of this measure and the relevant legislation is now a step closer to becoming law – the First Reading of the Bill was 14 October 2013. It is estimated that this change will remove up to 450,000 small businesses from having to pay National Insurance Contributions.
At the time the measure was announced, the Chancellor commented that ‘For the person who’s set up their own business, and is thinking about taking on their first employee – a huge barrier will be removed. They can hire someone on £22,000, or four people on the minimum wage, and pay no jobs tax’.
More details on how to claim the Employment Allowance will be made available in early 2014.