Q. I have a small business which I formed in August this year in the East Midlands. I have been successful to date and need to consider expanding my work force to service potential new orders. Unfortunately cash flow restraints could halt my ability to move my business to the next stage. I have been told by my bank manager to consider the Regional Employer NIC Holiday scheme. I hadn’t heard of this could you please let me know more about the scheme and how I could apply.
A. Cash flow is all important to businesses, especially in the current climate and never more so if you are in the first year of a new business.
Help for new businesses in service, manufacturing and other key industries is available and those that qualify are being urged to apply for a Government scheme that could save them thousands of pounds in staffing costs.
The ‘Regional Employer National Insurance Contributions (NICs) Holiday’ offers big reductions in employer NICs for new businesses who employ staff and meet certain criteria in specific regions. The scheme is open to new businesses set up on or after 22 June 2010 in the North East, Yorkshire and the Humber, the North West, the East Midlands, the West Midlands, the South West, Scotland, Wales and Northern Ireland. Eligible new businesses can apply for a refund of NICs that they have already paid.
The NICs holiday scheme is designed to encourage the creation of private sector jobs in regions reliant on public sector employment by reducing the cost to new business of employing staff.
Under the three-year scheme, eligible businesses can take a 12-month ‘NICs holiday’ for each of the first 10 employees they hire in their first year of business, up to a maximum of £5,000 per employee. This means new businesses who take advantage of the scheme could save up to £50,000 in total.
To date, more than 6,000 businesses have already applied for the scheme, which is administered by HM Revenue & Customs (HMRC).
To help publicise the scheme, HMRC have announced they will be writing to 144,000 new businesses over the next few weeks, to encourage them to find out more.
In a recent statement HMRC Director General Stephen Banyard said: “This is a real opportunity for new businesses, so don’t miss out. If you’re thinking of starting a new business, or have recently set one up, read the detailed HMRC guidance carefully, to find out if you’re eligible. If you are, apply now.”
Guidance on applying, and further information on the scheme, can be found by visiting www.businesslink.gov.uk/nicsholiday
If you need any further help or information you can also call our tax consultants on 01455 852550 who will be able to advise you.