Employers in the UK favour a cut in National Insurance contributions (NICs) above any other business boosting initiative, new findings show.
Research from business advisory firm Moore and Smalley Chartered Accountants finds that 40 per cent of business owners would prefer a cut in the rate of employer NICs to other tax cuts.
The procedure means that employers must pay NICs on the earnings provided to employers. However, critics argue that this practice dissuades businesses from creating new jobs.
Further findings reveal that 27 per cent of business owners questioned say that a cut in the rate of VAT would provide the biggest benefit to business.
Some 20 per cent point to a fall in corporation tax as a big driver of boosting business with the main rate of corporation tax set to drop to 23 per cent in 2013, down from 28 per cent in 2010.
Tony Medcalf, tax partner at Moore and Smalley, says that the survey shows that businesses want to hire but want to see some of the financial barriers to recruitment removed.
He adds, 'This backs up what we hear from clients on an almost daily basis. They have the customer demand to create jobs but, at a time when the economy is so unstable, they are reluctant to take on new staff if that means paying NICs at 13.8 per cent of the employee's salary and that's not to mention recruitment and training costs.'
Medcalf says that any reduction in NICs, or even a holiday from payment so that new jobs could be created, would be 'hugely advantageous'.
See also: Hiring self-employed staff