One in five small businesses feels optimistic about growth and expansion following the Government’s announcement to introduce a £2,000 allowance towards employer National Insurance contributions (NICs), research by Direct Line for Businesses has found.
A third of businesses also plan to recruit additional staff to take advantage of the reduced cost of employment once the Employment Allowance scheme is introduced. Small to medium-sized businesses (SMEs) account for more than 99 per cent of all private sector businesses in the UK.
The new allowance will come into effect from April 2014 and is estimated to take 450,000 of the UK’s smallest businesses out of paying employer NICs.
Announcing the allowance in the March 2013 Budget, Chancellor George Osborne said: “For the person who’s set up their own business, and is thinking about taking on their first employee, a huge barrier will be removed. They can hire someone on £22,000, or four people on the minimum wage, and pay no jobs tax.”