The Regional Employer National Insurance contributions Holiday for new businesses was announced in the emergency budget, 22nd June 2010. The scheme was introduced as a way to help new businesses create jobs, reducing the costs associated with recruitment.
The scheme will be in place from 22nd June 2010 to 5th September 2013 for new businesses which started trading on or after 22nd June 2010. Only businesses in specified regions of the UK will be eligible to apply and the regions include Yorkshire and Humber, Scotland, Northern Ireland, East and West Midlands, North East, North West, South West and Wales.
If a business meets the eligibility criteria, the first ten employees of the company will be eligible for the NIC holiday scheme. The employers National Insurance contribution will be reduced during the first year of employment, up to a maximum amount of £5000 per employee. The scheme could be worth up to £5000 for a new business with ten employees.
However, the scheme only runs for the first 12 months of employment, so an employee whose 12 months are outside the scheme finish date of 5th September 2013 will not be eligible for the whole year. The principle place of business must be in one of the specified regions to meet eligibility criteria.
The scheme is voluntary and as such an employer must apply to HM Revenue & Customs to be accepted. Employers should continue to make employer’s National Insurance Contributions until their application is approved by HMRC. If a company doesn’t want to take part in the scheme, they must pay NICs as usual.
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An experienced business and finance writer, sometimes moonlighting as a fiction writer and blogger.