Shropshire companies are set to receive a welcome tax boost with the introduction of the Government’s eagerly-awaited new Employment Allowance.
Under the new rules, every business and charity is entitled to £2,000 to reduce their employer National Insurance contributions bill each year. This will be of particular benefit to small businesses in the county.
Dyke Yaxley’s Chris Dorricott said: “The Employment Allowance was one of the most notable, and most welcome measures to come from George Osborne’s budget last year. It finally comes into effect on April 6.
“It is important that Shropshire companies confirm their eligibility through their regular payroll process, because up to £2,000 will be deducted from their employers’ Class 1 National Insurance contribution liability each year.
“It is estimated that, nationally, the allowance will benefit up to 1.25 million businesses, and result in around 450,000 businesses – or one third of all employers – being taken out of paying National Insurance Contributions altogether.”
Chris said: “The new allowance will undoubtedly come as welcome news to many businesses, providing additional funds for those seeking to take on more staff, and a reprieve for firms struggling with cashflow issues.
“To claim the allowance, employers need to notify HM Revenue and Customs by completing a simple ‘yes or no’ indicator on its latest payroll systems.”
More than 90 per cent of the benefit of this allowance will go to small businesses with fewer than 50 employees.
“It also means that businesses will be able to employ four adults, or as many as 10 people aged 18-20, full-time on the National Minimum Wage without paying any employer National Insurance contributions at all.
“There is no doubt that the Employment Allowance will reduce the barriers faced by small businesses which aspire to grow, by supporting businesses with the costs of employment.”
The allowance is available to businesses, charities and community amateur sports clubs.
Dyke Yaxley’s Chris Dorricott