Lucy gives thumbs up to the New Employment Allowance announced in the Budget.

Posted on: April 8th, 2013

“The introduction of the Employment Allowance in the Chancellors Budget (March 2013) is very welcome news and something we’ve been calling for for some time.

“From April 2014 up to £2,000 per year for all businesses and charities with employees can be offset against their National Insurance Contributions (NICs) bill. It seems that over 90 per cent of the benefit will go to small businesses, 450,000 of which will be taken out of NICs altogether.

“It also appears that the intent of this policy is very much around incentivising the creation of new jobs by small employers and start-ups, with the Budget stating that:

“The Employment Allowance will reduce the cost of taking on new staff for small businesses; supporting those with an ambition to grow by hiring their first employee or expanding their workforce. Every business will be able to employ one worker on a salary of £22,400, or four employees working full time on the adult National Minimum Wage, without paying any employer NICs at all.”

“This will clearly provide a much needed boost to the small business market and might also present more opportunities for smaller businesses and start-ups to be encouraged to take on more staff.

“At the same time, I note with some disappointment that the the planned increase in business rates will go ahead, which might offset any progress from this allowance.

“It’s hard to say whether or not this change will have a major impact on the labour market and as it is not set to be introduced for another year, I guess only time will tell.” Budget - Chancellor George Osborne

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