Why all business owners will be £2,000 better off from April 2014

The big announcement in the budget this year for small business owners was the introduction of the Employment Allowance from April 2014. Available to every business and charity in the UK, the Employment Allowance will take the first £2,000 off their employer National Insurance Contributions bill.

It is predicted up to 1.25 million businesses will benefit , with 98% of the benefit going to small and medium sized businesses with fewer than 250 employees. The allowance means a business can employ someone on a salary of £22,400 without paying any employers National Insurance.

As well as encouraging businesses to take on new employees this allowance is designed to encourage business owners to take on more full time employees as in the past many have been put off by the extra cost of having to pay the Employers National Insurance.

In order to claim the allowance you will need to tick a box on your April 2014 RTI submission to confirm you are eligible then you will only have to pay Employers National Insurance once the £2,000 allowance has been exceeded.

I’m constantly surprised at how little press this tax break is receiving. As a business owner myself I’m very happy about having an extra £2,000 profit next year thanks to HMRC!

Carol Lewis, Director - Bainbridge Lewis

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