Do you qualify for the £2,000 NIC cashback?

From 6 April many businesses will be able to get a reduction on their National Insurance Contributions (NIC).

With two months to go to the launch, HMRC has issued fresh guidance on the scheme, explaining which businesses and charities could be eligible and how they can set about claiming the Employment Allowance through their PAYE system.

The scheme enables businesses to get up to £2,000 off their NIC bill. According to the government, it will cut NICs for 1.25 million businesses and around a third of these (450,000) will not have to pay any NICs at all. It also says that more than ‘90% of the benefit of this allowance will go to small businesses with fewer than 50 employees.’

When the scheme was announced in October last year the government said it would give small businesses the leeway to employ four adults or ten 18-24-year-olds on the National Minimum Wage without having to pay any NICs at all.

Commenting at that time, the Federation of Small Businesses estimated that SMEs would use the allowance increase wages (29%), employ extra staff (28%) and invest in their business (24%).

The latest HMRC guidance says the Employment Allowance scheme is a simple process for businesses, handled through their payroll providers. To see if you are eligible go to:

www.gov.uk/employment-allowance-up-to-2000-off-your-class-1-nics

There are 2 comments for this article
  1. Euroffice Customer at 1:45 pm

    If a business employs 51 people, there is a backhanded incentive to reduce this number so they qualify for this allowance…

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