In a bid to save valuable cash for the UK’s small businesses, Chancellor George Osborne has unveiled a new Employment Allowance to save the first £2,000 of national insurance (NI) paid by every company.
The saving will aid all 450,000 small and medium-sized enterprises (SMEs) in the UK, a third of Britain’s employers, who will pay no employer national insurance.
Any business start-up looking to employ their first member of staff will be able to hire an employee on a wage of £22,000 per annum and avoid paying national insurance. Similarly business owners can employ four workers on minimum wage without having to pay employer NI contributions.
The allowance is expected to come into place from April 2014 pending independent approval.
Within the Chancellor’s Budget unveiled this lunchtime, it was also announced the corporation tax would be cut by a further one per cent to 20 per cent in 2015.
Additionally, the jobs sector is expected to outperform last year with 600,000 more jobs predicted in 2013 than at the same time 12 months ago.
The nation’s official growth forecast was, however, halved by the Chancellor, with growth expected to be just 0.6 per cent in 2013 compared to the 1.2 per cent he predicted just four months ago in his autumn statement.
Mr Osborne reiterated that he was on the side of "hard working voters" by confirming he was increasing the tax-free personal allowance to £10,000 in 2014 – a year earlier than previously planned.
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