One of the well-received outcomes of the budget was the announcement of the £2,000 Employer’s NIC allowance which is due to take effect in April 2014. In previous years, businesses have been given NIC holidays, but to remove the first £2,000 is a welcome break, particularly in these tough economic times. Almost a third of businesses will pay no Employer’s NIC at all when the changes take effect.
This move will particularly benefit smaller businesses who employ staff by cutting their contributions and will encourage employers to take on more staff, therefore decreasing unemployment and providing more opportunities.
The allowance will be set off against Employer’s NIC contributions through the PAYE RTI system.
Other notable announcements were the reduction in the main rate of corporation tax to 20% and the increase in the income tax personal allowance to £10,000 in 2014/15.