Friday, 8 February 2013

Employer's National Insurance Holiday

New employers can still benefit from the Employer's National Insurance holiday introduced in 2010. This exemption applies to Employer's National Insurance chargeable for the first twelve months of the business or up to 5 September 2013, whichever comes first. At up to £5,000 National Insurance for the first ten employees, this relief is worth looking at closely for those who qualify. In order to qualify, there needs to be a new business starting and paying a wage before 5 September 2013. This does not have to be a new company or individual starting in business, it applies equally to an existing business provided that it is performing wholly or mainly new activities. The key point is whether these business activities were carried on in the proceeding six months.  HMRC give the example of a traditional being closed down by a new owner, refurbished and reopened as a gastro pub as one that would qualify. A business that has simply changed ownership may well not qualify, therefore the incorporation of a sole trader or partnership into a limited company will not receive the exemption unless the business activities wholly or mainly change.

The business must have its principal place of business in one of the following regions:-

·                    Northern Ireland
·                    Scotland
·                    Wales
·                    East Midlands
·                    North East
·                    North West
·                    South West
·                    West Midlands
·                    Yorkshire and Humber

Certain sectors such as road freight and agriculture have restrictions based on EU state aid rules. Managed service companies do not qualify.

If a business has paid National Insurance when it feels that it should have qualified for this relief, an application form can be submitted to claim a repayment. The business must have commenced after 22 June 2010 and contributions after 6 September 2019 may qualify.

G M Beeley

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