From yesterday (6th April 2014), around 1.25 million businesses and charities will now be able to benefit from Employment Allowance. Employers can reduce National Insurance contributions (NIC) by up to £2000, paying less or in deed nothing to HMRC for their employees.
If you pay less that £2000 every year in NIC, you will no longer need to pay anything. It’s estimated around 450,000 businesses can now stop making payments.
Any businesses, charities and amateur sports clubs that pay class 1 National Insurance contributions are eligible – use the government’s handy calculator to check how the allowance affects your business. Note that public authorities cannot claim. Furthermore, if you are in a group of companies, only one company is entitled to the allowance.
You can use your current payroll software to claim.
This is great news for small businesses and is a welcoming approach from the government to help alleviate financial struggle.