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Employment Allowance Hailed As ‘Jobs Cashback’

Employment Allowance Hailed As ‘Jobs Cashback’

The Chancellor has said the introduction of the Employment Allowance in April is effectively “cashback on jobs”.

The employment allowance – announced in last year’s Budget – will allow employers to claim up to £2,000 a year off their National Insurance bill. New Treasury figures show that by the end of Parliament, the cut to National Insurance contributions (NICs) will see businesses save almost £5.5 billion per year – or £200 per each member of staff.

George Osborne’s comments came as he toured two small businesses that will benefit from the changes, saying:

“Small businesses make a vital contribution to our economy, creating jobs and stimulating growth. The ones I have visited today want to expand, take on new staff and make new investments so the actions we have taken to cut the jobs tax will be a real boost to them. Effectively providing cashback on jobs, the Employment Allowance will help these businesses achieve their goals and help the UK succeed in the global race.”

The £5.5 billion a year figure was reached by also taking into account cuts in National Insurance contributions for employees aged under 21 from April 2015 as well as a move to reverse an earlier planned rise in the rate of NICs.

Our Employment team provides advice on the employment aspects of all major business decisions. For advice, contact a member of the team, call us on 01895 207892 or email employment@ibblaw.co.uk.