Good News for Small Business With New Employment Allowance
The government is to introduce a new employment allowance in April, which will see a saving of £200 per employee.
The allowance will also cut £2,000 from businesses’ National Insurance contributions, projected to save £5.5bn per year for employers.
National Insurance contributions will also be abolished for employees under the age of 21. The previous government increased the rate of employer NI contributions, so the move to raise the threshold before a business must pay NI for an employee is a welcome one for small businesses.
Chancellor George Osborne said: “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.”
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