A new employment allowance will give businesses, charities and community sports clubs up to £2,000 a year towards their employer national insurance contributions bill from April 2014.
A new employment allowance will give businesses, charities and community sports clubs up to £2,000 a year towards their employer national insurance contributions bill from April 2014.
‘The cost of employing people is a burden on small firms. And it is a real barrier to taking an extra person on,’ George Osborne said.
‘[The allowance] will mean that 450,000 small businesses – one third of all employers in the country - will pay no jobs tax at all. 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.’
Francesca Lagerberg, head of tax at Grant Thornton, said the chancellor had brought out a few business-friendly measures and the employment allowance was ‘top of the list’.
The announcement was ‘good news for entrepreneurs’, said Richard Mannion, national tax director at Smith & Williamson.
Patrick Harrison, tax partner at PKF, said the move was one of the biggest surprises of the Budget. ‘It remains to be seen if it’s enough to encourage SMEs to take on additional staff, but it will certainly be welcome by the owners of smaller companies – particularly family owned businesses and one-man bands – in this tough economic climate.’
Patrick Stevens, president of the CIOT, said: ‘The chancellor presented this as a simple way to help small employers and a simple reduction in their tax bills will be welcomed. But the trick is to make sure it is simple not only in concept but also in execution. There are mechanics to sort out such as whether a small business withholds up to £2,000 of NICs or has to pay first and reclaim later.’
A new employment allowance will give businesses, charities and community sports clubs up to £2,000 a year towards their employer national insurance contributions bill from April 2014.
A new employment allowance will give businesses, charities and community sports clubs up to £2,000 a year towards their employer national insurance contributions bill from April 2014.
‘The cost of employing people is a burden on small firms. And it is a real barrier to taking an extra person on,’ George Osborne said.
‘[The allowance] will mean that 450,000 small businesses – one third of all employers in the country - will pay no jobs tax at all. 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.’
Francesca Lagerberg, head of tax at Grant Thornton, said the chancellor had brought out a few business-friendly measures and the employment allowance was ‘top of the list’.
The announcement was ‘good news for entrepreneurs’, said Richard Mannion, national tax director at Smith & Williamson.
Patrick Harrison, tax partner at PKF, said the move was one of the biggest surprises of the Budget. ‘It remains to be seen if it’s enough to encourage SMEs to take on additional staff, but it will certainly be welcome by the owners of smaller companies – particularly family owned businesses and one-man bands – in this tough economic climate.’
Patrick Stevens, president of the CIOT, said: ‘The chancellor presented this as a simple way to help small employers and a simple reduction in their tax bills will be welcomed. But the trick is to make sure it is simple not only in concept but also in execution. There are mechanics to sort out such as whether a small business withholds up to £2,000 of NICs or has to pay first and reclaim later.’
