Two possible NI breaks for employers

Statutory Residence Test

The final touches have only just been made to the NI employment allowance. Now there’s talk of another NI break for employers. What’s the full story?
A definite NI incentive. Starting in April 2014 the employment allowance (EA) will be available to all employers with fewer than 250 employees (including directors). It will be worth up to £2,000 per tax year and will be given in the form of a credit against your employers’ NI contributions.

How to claim. Whether you use proprietary payroll software or HMRC’s free PAYE Basic Tools, a one-time claim procedure will be incorporated in the program. According to HMRC, all that will be needed is a “tick in the box” . The software will then work out how much EA to knock off the amount you pay to HMRC.
You don’t need to take action yet. Both HMRC and software providers will notify you of the exact procedure nearer to April next year. We’ll also keep you posted on developments.

A possible NI incentive. It’s been suggested to the Chancellor that there should be a second NI break for employers aimed at getting younger people into work. Apparently, the proposal is being considered by the Treasury and we may hear more about it in the Chancellor’s Autumn Statement on 5 December.

What’s it worth? The suggestion is that businesses should be entirely let off paying employers’ NI for a fixed period in respect of workers they take on who were under 25 at the time and previously unemployed. Even if the suggestion is taken up by the Chancellor it’s a dead certainty that the NI break won’t be available until April next year at the earliest. If you’re considering taking on another worker it’s worth hanging on at least until after we hear what’s in the Autumn Statement. If the incentive were to be introduced, say, for workers taken on from the start of the 2014/15 tax year, you could save yourself NI contributions by delaying until then.