smallbusiness.co.uk: Helping your business think big

Email a Friend

National insurance allowance inspires many small companies to grow
George Osborne announced the national insurance measure in the Budget

Small businesses have been encouraged to expand following a government initiative to reduce their national insurance (NI) burden, research finds. 

One in five small enterprises now look to grow following the decision announced in the 2013 Budget to introduce an employment allowance of £2,000 a year towards national insurance contributions, according to a survey by insurer Direct Line for Business.

In addition to those small businesses that are looking to expand, a further 33 per cent of firms are considering recruiting due to the reduced cost of employment.

Jazz Gakhal, head of Direct Line for Business says, 'It is encouraging to see that so many UK businesses are looking to expand. The government’s decision to reduce the financial burden for small companies is a welcome boost for owners and managers across the country.  

'Given small and medium-sized enterprises account for over 99 per cent of all private sector businesses in the UK, the health of this sector is vitally important.'

Of the NI cut, seen as the largest tax cut in the 2013 Budget, chancellor George Osborne said, ‘For the person who has set up their own business, and is thinking about taking on their first employee, a huge barrier will be removed.’

Helen Dickinson, director general of British Retail Consortium (BRC), welcomed the change, saying, 'We called for a time-limited national insurance holiday, as an easy way to encourage businesses to take on young unemployed people. Existing incentives are cumbersome and not being taken up.

'The employment allowance will help many small businesses with the cost of taking on staff. But it won’t incentivise larger businesses, which also have a vital role in creating jobs.'

See also: Small businesses condemn National Insurance rises

Related topics: Tax & Vat

Previous article

Confidential information being shared freely within businesses

Next article

Small companies at risk of online fraud with many going unprotected

Post a comment

1 comment

Geoffrey Kitching

Doesn't help me at all. I, like many other small businesses, am a sole trader. My NI bill has not changed. Its a shame that, in claiming to help small businesses, the Chancellor has ignored the smallest.

Related

News | Opportunities

Government to help cure small companiesí cash flow problems

News | Management

Liability insurance relief for small firms

News | Management

National awards for skills development

News | Outlook

Jamie inspires enterprising youngsters

Small Business Offers

  • The power of Vodafone One Net Business

    Datacom Recruitment are better connected cutting costs by £2,000 a month. With landline, mobile and desktop comms all on one system. Vodafone One Net Business.

  • Telephone answering service

    Get your own Moneypenny PA – one person you know and trust, to look after your calls. Take a fre trial.

  • Apprenticeships - The University of Work

    Apprentices study your business in your business. By learning your way of working they can help your company to grow. Kick-start the process today. 

  • Experts In Business Growth

    We work with businesses to identify what's holding them back, then let them choose an expert coach who will help them hit their growth targets.

  • Hassle-free switch for your business

    Moving your business bank account has never been quicker or easier. The Current Account Switch Service is designed for small businesses.

  • A Refreshing Alternative to a Business Loan

    Payback as you earn.  No APR, just one simple cost. Between £2.5k & £300k available. Must accept card payments & been in business 6+ months.

  • The smarter way to get cash flowing

    Running a business can be challenging so it’s important to ensure that you choose a funding solution that keeps you firmly in control while providing the flexibility to grow.

More from Small Business

Starting a Business
Five dos and don'ts when self-branding your business

Five dos and don'ts when self-branding your business

Here are some tips on what to do and what not to do when seeking...  

Financing a Business
Late payment and how to ease the cash flow pressure

Late payment and how to ease the cash flow pressure

Here, we look at the problem of late payment, who it affects the most and...  

Running a Business
Social media for the small business: Start by listening

Social media for the small business: Start by listening

Here, Meera Sapra discusses how to create a personal voice on social media....  

Blog
Five practical tips for conducting a job interview

Five practical tips for conducting a job interview

Robert McHenry presents guidance on making your prospective employee as comfortable as possible....