National insurance holidays – Royal Assent granted
HMRC have confirmed that the legislation relating to the employer national insurance contributions (NICs) has now been passed by Parliament and employers can now apply to use the scheme without concern that the criteria might change. The application process has been extended to allow authorised agents to complete the application online on behalf of their clients.
The NICs holiday scheme is designed to help new businesses in qualifying regional areas to create jobs, by reducing the costs of employing staff. The scheme is only open to qualifying new businesses outside London and the South East.
The scheme operates by allowing a deduction against the amount of Class 1 NICs that a qualifying employer is required to pay to HMRC each month or each quarter. The scheme which was officially introduced on 6 September 2010 runs from the original date of the announcement on 22 June 2010 until 5 September 2013.
The holiday applies to all relevant earnings paid to a qualifying employee during the first year of an employee’s employment or for the time left until the Holiday scheme ends on 5 September 2013. A qualifying business is entitled to an exemption for up to a maximum of £5,000 of Class 1 employer NIC for each of the first ten qualifying employees.