UK Contractors: Over 850,000 employers are currently benefitting from the Employment Allowance
Limited company contractors might be interested to hear that over 850,000 UK employers are benefitting from the Employment Allowance.
Originally announced at Budget 2013, the Employment Allowance provides a reduction in National Insurance Contributions that an employer pays on their employees, and is worth up to £2,000 for eligible businesses and charities.
After just six months of being launched, figures have shown that over 850,000 UK employers have benefitted from the Employment Allowance, with this number expected to increase throughout the rest of the tax year.
Chancellor George Osborne, commented, “Today’s figures show that half way through its first year over 850,000 businesses across Britain have already benefited from a cashback on jobs.
“Businesses across the country can claim a cut in their National Insurance bill, worth up to £2,000, thanks to the Employment Allowance – and if they haven’t already then I urge them to do so.
“This 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.”
John Allan, National Chairman of the Federation of Small Businesses (FSB) added, “We’re really pleased to see so many businesses already taking advantage of the Employment Allowance. We called on government to help small employers invest in staff, and now we see how this additional support has been spent.
Our members have used the Allowance by paying workers more, hiring new people and increasing training. It’s also good to see a quarter of those that used the allowance to hire new staff took on an apprentice. We will work with government to raise the profile of the Employment Allowance so all the firms eligible, claim it.”
Can I claim Employment Allowance?
You are able to claim for Employment Allowance if you’re either a business or charity paying employers’ Class 1 National Insurance.
Examples of those who cannot claim include:
- A domestic employer who employs someone for personal, household or domestic work, such as a nanny or gardener.
- A public body or business whose work is ‘wholly or mainly of a public nature’, such as local councils and NHS services (unless a charity).
- A service company with only deemed payments of employment income.
For more information on this and whether your company could benefit, speak to your contractor accountant.
How could registering for the Flat Rate VAT Scheme benefit you? Read our plain English guide on the Flat Rate VAT Scheme.
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