Countdown begins to national insurance cut
Employers should be aware that planned changes to national insurance contributions (NICs) that will cut the costs of every business and charity employer by hundreds of pounds have moved a step closer.
The National Insurance Contributions Bill was introduced in the House of Commons on 14 October. It is anticipated that it will become law in April 2014, once it has also been through the House of Lords and received Royal Assent.
The Bill will cut national insurance contributions by £2,000 for up to 1.25 million employers, while around 450,000 businesses – or one third of all employers – will be taken out of paying national insurance contributions altogether. More than 90 per cent of the benefit of the new allowance will go to small businesses with fewer than 50 employees.
The Employment Allowance, as it will be known, will also apply to charities and community amateur sports clubs, with up to 35,000 charities with employees expected to benefit by around £45 million a year in total.
The Government has said that as a result of the new allowance, businesses would be able to employ four adults or ten 18 to 20-year-olds full-time on the national minimum wage without paying any employer national insurance contributions at all.
For employers to claim the allowance, once it becomes law, they will need simply to confirm their eligibility through their regular payroll processes, ensuring that up to £2,000 will be deducted from their employers’ national insurance liability over the course of the year’s PAYE payments.
Should you require any further information please do not hesitate to contact Lorraine Wilkinson at the office.
Author: Lorraine Wilkinson
Lorraine joined Scott & Wilkinson in 2001 bringing with her over 20 years payroll experience. As payroll manager, she oversees the smooth running of the firms payroll bureau which includes all aspects of day to day payroll. Lorraine is...
Add your Comment
We have the ability to edit and/or delete posts and comments. Links should be relevant to the topics. Please note all comments are subject to review before inclusion.