National Insurance holidays for new businesses
HMRC have confirmed that every employer who has successfully applied for the National insurance contributions (NICs) holiday will be sent a paper NICs holiday end of year return during the month of March. The return should be completed and returned to HMRC by 19 May 2011.
The NICs holiday scheme is designed to help new businesses, in qualifying regional areas, 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, that was officially introduced on 6 September 2010, runs from the original date of the announcement on 22 June 2010 (as part of the coalition Government’s first Budget measures) until 5 September 2013.
The holiday will apply 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 up to a maximum of £5,000 of Class 1 employer NIC for each of the first ten qualifying employees.