The Benefit for Current Employers
If you already have employees, you will find that your NIC bill will go down. In his March budget, the Chancellor of the Exchequer, George Osborne, confirmed that the first £2000 of annual contributions from employers in businesses and charities would be waived. If you normally pay less than £2000, you could be one of the 450,000 businesses in the country that won’t be expected to contribute anything.
Benefit for Small Businesses
Essex bookkeepers Office Assistants http://www.officeassistants.org explain what this means: "Called the Employment Allowance, it is, of course, part of the government’s strategy to get more unemployed people back into work. However, all hard pressed small business owners and their bookkeepers recognise it as a godsend for anyone who is cash strapped or wanting to expand and recruit, but held back by finances."
This Employment Allowance is a new strategy because it covers the whole of the country, rather than being introduced in a few deprived areas which have been given certain tax breaks in the past. The government believes it will benefit around 1.25 million organisations in all.
How Will it Work?
Office Assistants feel that most people really welcome this move, but Patrick Stevens, President of the Chartered Institute of Taxation, offers a word of warning, when he said in response to the budget announcement, "There are mechanics to sort out such as whether a small business withholds up to £2,000 of NICs or has to pay first and reclaim later. We will be doing our best in discussions with HMRC to make sure this new scheme really helps employers and doesn’t tangle them in more red tape."
Businesses do have to apply, but government information stresses that this can be achieved by ticking a box on your PAYE return, which sounds simple enough. Your outsourced bookkeepers will do this for you, and will be carefully following the news on how this is all working out.
Office Assistants offers bookkeeping services and much more to clients throughout the south east of England from their base in Rainham, Essex. For more information visit http://www.officeassistants.org.