The centrepiece in a Budget speech carefully crafted to appeal to the small business was the Chancellor's announcement of a £2,000 “employment allowance” that will cut £2,000 from every company’s NIC payments.
The annual £2,000 allowance will be offset against every employer's Class 1 secondary NICs from April 2014. The allowance will be claimed as part of the normal payroll process through RT, explained paragraph 1.19 of the Overview of Tax Legislation and Rates (OOTLAR)
But aside from the Chancellor's comment and the OOTLAR paragraph, no further information is available as NI measures often go through a separately from the annual finance bill, explained Rebecca Benneyworth.
“This is big,” she commented during the speech, adding later that it was a genuine stimulus for smaller businesses.
“It will relieve employer contributions, but not employees’. But it’s still a significant move to remove tax on jobs,” she said. “It’ll be claimed through the normal RTI process, after the government consults with stakeholders about implementation.”
About John Stokdyk
John Stokdyk is the global editor of AccountingWEB UK and AccountingWEB.com.