What is the 'NIC holiday'?

I’ve heard about a NIC holiday, but I’m not sure what it means or if I’m eligible. Can you tell me more about it please?

1st August 2011

Its full title is the Regional Employer National Insurance Contributions (NICs) Holiday for New Businesses. As the name suggests, it is focused at new business, set up between 22 June 2010 and 5 September 2013.

Under the scheme, new businesses may qualify for a reduction of up to £5,000 from their employer’s NICs that would normally be due, for each of the first ten employees they take on for up to 12 months.

You can only apply for the NICs holiday if your principal place of business is located within specific areas of the UK when your business started up, which can be found on HMRC's website.

Most trading entities can apply, i.e. sole trade, trading charity, company, investment business etc.

Please note, there can be complications if the business is in receipt of other state aid, unclear in what region it is, when it started or whether it is truly new.

You can apply for the scheme online on HMRC's website or if a bit more complex as above, HMRC prefer you to submit a paper form which you can obtain from the Employers Helpline on 0845 60 70 143.

If you think you may have been eligible, but didn’t apply for the scheme, you may also be able to backdate a claim.

If it sounds like you may qualify, you should complete and submit a form. Your local TaxAssist Accountant would be happy to help you with your claim or any other payroll matters.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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