Today there will be the Second Reading of the National Insurance Contributions Bill. The Chancellor of the Exchequer, George Osborne, announced the introduction of a new Employment Allowance in his Budget Speech in March this year.
Starting in April 2014 all businesses, charities and community sports clubs will be entitled to claim up to £2,000 from their annual payment of secondary Class 1 National Insurance contributions (NICs). Class 1 NICs are paid by both employees and employers on the employee’s earnings. The employee’s share is known as the primary contribution, the employer’s as the secondary contribution. Employers are liable to pay secondary Class 1 NICs at 13.8% on all employee earnings above the secondary threshold which is set at £148 a week.
Whilst all businesses in Bury will benefit it will be of most benefit to the very smallest companies in and to the sole trader looking to take on their very first employee.