THE GOVERNMENT is to deliver a saving of £200 per employee with the introduction of the employment allowance in April.
The allowance will also wipe out up to £2,000 off businesses’ total National Insurance, with Treasury figures showing that the cuts will save nearly £5.5bn per year for employers by the end of the parliament.
Alsongside the allowance, National Insurance for employees under the age of 21 will be abolished from April 2015, while the threshold will be raised before a business starts paying National Insurance for an employee in April, which reversed the most damaging part of the increase in the employer NICs rate, under inherited plans.
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.”
The ATT had previously expressed concern that the legislation was overly complex and created unnecessary complications within the practical working of the new allowances
Introduced in 2013 to encourage R&D investment, the scheme allows UK businesses to pay only 10% corporation tax on profits derived from any UK or certain EU patents
Yet, KPMG’s annual survey shows that the UK is still an attractive place to do business, despite falling in rankings in tax competitiveness and FDI appeal
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