The HMRC has now issued guidance and exclusions on how to claim up to £2000 per year of your Class 1 NIC’s and don’t forget it takes effect on 6th April 2014.
Visit https://www.gov.uk/employment-allowance-up-to-2000-off-your-class-1-nics for further details.
Chancellor George Osborne has said that “This new tax cut is part of our long term economic plan to back businesses investing in jobs. That is how you deliver greater economic security for hardworking people”
It is of note that the allowance can be claimed monthly. Therefore if your Employer’s National insurance is £500 a month you can claim the £500 in April , £500 in May and so forth until you reach the £2000 limit.
My view frankly is that at a capped amount of £2000 I don’t think it’s enough to reinvest in employing additional staff, but I guess it may be enough to implement a salary increase and reward your hardworking employees. Having said that that though, it is however certainly a boost to small businesses giving some leeway to reinvest in your business and will mean that you may not pay any Employer’s National Insurance at all which can only be good!
