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“Government needs to take measures to help rest of UK”
A tax break intended to support the UK’s small businesses is geographically limited, and will benefit mainly firms in and around London, according to national accountancy group MHA MacIntyre Hudson.
The annual £2,000 allowance to reduce employer National Insurance contributions (NICs) – set to come into effect in April next year – is expected by the Treasury to give provide an advantage to 1.25m enterprises, with 450,000 paying no employers’ NICs in 2014/2015.
The government yesterday released figures to show which regions and trade sectors will gain an advantage from the new allowance.
MHA MacIntyre Hudson tax partner Chris Blundell warned that most beneficiaries will be in the capital city and southeast of England, where 142,000 small businesses will be taken out of employer’s NICs, while the effect will be felt by only 15,000 in the northeast, 35,000 across the West Midlands and 33,000 in Scotland.
“Although this initiative is a great boost for small employers, it hardly helps the ones who need it the most. It seems unfair that those who will most benefit… work in London and the southeast. The government needs to take measures to help the rest of the UK,” said Blundell.
The employment allowance will be available to firms, charities and community amateur sports clubs, but not domestic employers, such as parents who employ nannies. Organisations will confirm their eligibility through their usual payroll processes, receiving the NICs break through standard payroll software and HMRC’s real-time information system.
