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National Insurance costs to be reduced

National Insurance costs to be reduced

The costs of employment will be brought down under new measures outlined in the Queens Speech, the Government says.

Under the National Insurance Contributions Bill, employer National Insurance Contributions (NICs) will be reduced from next April, entitling every business and charity to a £2,000 employment allowance.

The move takes forward a pledge made in the last Budget to cut NICs for small firms. It is thought as many as 1.25 million employers will benefit, with around 450,000 of these lifted out of paying employer NICs completely.

The measure will save each employer up to £2,000 on its employer NICs bill, while it will save employers overall £1.3 billion in 2014/15, rising to £1.7 billion in 2017/18, the Government said.

Most of the benefit of this allowance goes to small and medium-sized businesses with fewer than 250 employees. Businesses will be able to employ one additional worker on a salary of £22,400 or an additional four employees working full-time on the adult national minimum wage without any increase in their employer NICs bill.

IBB’s Employment Team provides advice on the employment aspects of all major business decisions. To contact a member of the team for advice, call us on 01895 207892 or email employment@ibblaw.co.uk