Up to 89,000 businesses in the manufacturing industry will be among those to benefit from a reduction of up to £2,000 from their employer National Insurance Contributions (NICs) bill, HMRC announced today.
The Revenue says the businesses will be able to cut their NICs bill – the tax that an employer pays for employees’ entitlement to a State Pension – from April 2014 thanks to the Government’s new Employment Allowance.
Available to all 1.25 million businesses and charities in the UK, over 90 per cent of the benefit of this allowance will go to businesses with fewer than 50 employees. Some 19,000 businesses in manufacturing paying NICs of £2,000 or less will see their employer NICs wiped out.
A business that employs one person on £22,400 will pay no employer NICs. A business employing five adults full-time on the national minimum wage will see their employer NICs bill reduced by over 80 per cent.
Available every year, HMRC says the allowance will be simple to claim and easy to administer. “Businesses will just have to confirm their eligibility for the allowance through their regular payroll processes and up to £2,000 will be deducted from their employer NICs liability over the course of the year,” a statement said.
Copyright Ken Hurst 2013