National Insurance Cut ‘to boost jobs’
Chancellor of the Exchequer, George Osborne, has announced a new tax cut called ‘Employment Allowance’. Companies in the UK will receive a reduction of £2000 off their National Insurance Contribution.
The tax cut is primarily aimed at smaller businesses who historically may have been deterred from hiring new staff; due to the 13.8% National Insurance levy they are currently charged.
To take advantage of the new allowance, which will be available from next April, firms will simply need to inform HM Revenue and Customs, and the cut will be ‘delivered through standard payroll software’.
Mr 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.”
Anne Redstone, professor of Law at King’s College London said: “Hopefully it will provide a welcome spur to real employment.
“This Budget may thus give a welcome boost to the job prospects of elderly people seeking work after retirement, and encourage this sector of the population to remain in employment.”
The chancellor also announced he was reducing the amount of corporation tax that businesses will have to pay, by just 1%, from April 2015. The current corporation tax rate in the UK is 23%, which is due to be reduced to 21% next year.
“Britain will have a 20% rate of corporation tax – the lowest business tax of any major economy in the world,” said Mr Osborne.
Pic source: Daily Record