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SAVE up to £5,000 per employee on National Insurance Contributions
New government scheme to encourage new business |
What is the ‘Regional Employer National Insurance Contributions (NICs) Holiday for New Businesses’?
It’s a new government scheme to encourage new business starting up between 22 June 2010 and 5 September 2013 in those parts of the UK most reliant on public sector employment, offering substantial reductions in employer NICs.
How will it work?
Under the three-year scheme, eligible businesses will be able to take a ‘holiday’ for each of the first 10 employees they hire in their first year of business. Each holiday will last for the first 52 weeks the employee is in post (providing these weeks fall within the three-year holiday period).
How much is the holiday worth?
New businesses who take advantage of the scheme will be able to save up to £50,000 in employer NICs – £5,000 per employee, up to a maximum of 10 new employees.
What do you mean by ‘a new business’?
A business that starts a trade, profession or vocation on or after June 22. The aim of the scheme is to kick-start economic growth in the areas that most need it and only businesses that undertake a significant amount of new economic activity will benefit from the scheme.
Most types of new business will be eligible for the holiday, as long as they employ staff and meet set criteria. For full details, see www.businesslink.gov.uk/nicsholiday.
What regions will benefit?
New businesses based in Scotland, Wales, Northern Ireland, the North East, Yorkshire and the Humber, the North West, the East Midlands, the West Midlands or the South West.
I set up a new business this summer. What do I need to do?
If you have set up a new business since June 22, and want to take advantage of the NICs holiday, read the online guidance at www.businesslink.gov.uk/nicsholiday to see if you’re eligible.
I’m in the process of setting up a new business. What do I need to do now?
As soon as you register with HM Revenue & Customs as a new employer, you can apply to join the scheme – read the guidance at www.businesslink.gov.uk/nicsholiday and see if your business qualifies for the scheme.
My company is expanding into a new area of business, can I apply for the scheme?
No. The scheme is only open to new businesses set up on or after June 22.
What about employee National Insurance Contributions?
These are not covered by the scheme, so employers will need to deduct these as usual.
Is there any restriction on the type of employee I can hire?
Most employees will be covered by the scheme but there will be some specific exclusions, for example staff operating under the IR35 rules for contractors. For full details, see www.businesslink.gov.uk/nicsholiday.
Is there any restriction on how much I can pay my employees?
No. But there is a maximum amount of NICs relief you can claim for each employee: £5,000.
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