The Government is actively pursuing policies aimed at creating new jobs for people who are currently out of work and providing help to employers, particularly small employers to keep on the people they currently have in employment.
One such policy, unveiled by the Chancellor of the Exchequer George Osborne in the 2013 budget, is that there will be £2,000 for each employer to offset against Employer’s National Insurance on wages they pay to their employees. This will be available to all employers, charities and community amateur sports clubs. This annual entitlement dubbed the ‘Employment Allowance’ it is hoped will encourage employers to retain their existing staff as well as encourage businesses to take on additional employees.
From 6th April 2014, employers will be able to start to use their £2,000 against payments of Secondary Class 1 National Insurance contributions due for their employees. They can continue to offset until either the £2,000 is exhausted or the tax year ends, whichever comes first.
The claim is made simply by setting a Yes/No indicator on your payroll software to ‘Yes’. Once this has been done the Employment Allowance will be available for 2014/15 and future tax years.
This initiative has particularly been aimed at helping small employers and, as a result, it is estimated that as many as 450,000 small employers will have no Employers’ National Insurance to pay while ever the initiative lasts.
At DEB Chartered Accountants we will be ensuring that our clients with employees or looking to take on employees will be taking full advantage of this initiative in the coming tax year and beyond. If you feel that we can be of any assistance to your business in respect of this Employment Allowance or any other accounting matters, please do not hestitate to get in touch.
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