Today a new regional National Insurance Contributions (NICs) holiday for new businesses came into effect.
New business set up outside London, the South East and East of England will be eligible for a holiday worth up to £5,000 for up to the first ten employees they hire in their first year of business. This means a maximum saving on their national insurance payments of up to £50,000.
The scheme will run for three years. It is estimated that 400,000 new businesses will benefit by having a lower tax bill from employing new staff.
New businesses established since the announcement in the Budget on the 22nd June, and which meet the qualifying criteria, will also be eligible to apply.
The regional NICs holiday, announced in the June Budget, will encourage the creation of private sector jobs in regions reliant on public sector employment by reducing the cost to new business of employing staff.
Exchequer Secretary to the Treasury, David Gauke:
"We need to rebalance our economy which has become over reliant on public spending and jobs provided by the public sector.
"The NICs holiday for new businesses in addition to cuts in corporation tax will provide a valuable boost to start up businesses and help foster the private sector led recovery that will drive growth in the UK over the coming years"
Notes for Editors
1. The Regional Employer NICs Holiday for New Businesses was announced by the Chancellor at the June 2010 Budget.
2. For more information on the National Insurance Contribution Holiday from the 6th September you can go to www.businesslink.gov.uk/nicsholiday.
3. Employers will be able to make holiday deductions each time they are due to make monthly or quarterly payments to HMRC.
4. Most kinds of new business will be eligible for the holiday, providing they employ staff and meet certain criteria, which are set out in the detailed HMRC guidance.
5. HMRC published a technical note on the National Insurance Holiday on the 27th August which can be found at http://www.hmrc.gov.uk/budget2010/nics-hol-new-bus-tn.pdf.
6. Businesslink.gov.uk is the official government website for businesses of all sizes. It provides people with easy access to authoritative information, transactions and support to help them conduct their dealings with government and to find the information they need.
Non-media enquiries should be addressed to the Treasury Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to firstname.lastname@example.org
This Press Release and other Treasury publications are available on the HM Treasury website hm-treasury.gov.uk For the latest information from HM Treasury you can subscribe to our RSS feeds or email service.
To subscribe to the Treasury's press notice mailing list send an email to Press List with the words SUBSCRIBE PRESSLIST in the subject field.
To unsubscribe from the mailing list email Press List with the words UNSUBSCRIBE PRESSLIST in the subject field.
Media enquiries should be addressed to the Treasury Press Office.
Phone: For enquiries please contact the above department