Budget: 'Tax on jobs' out for one in three employers
20 March 2013
A third of all employers will no longer pay employers’ National Insurance Contributions (NICs) as a result of Chancellor George Osborne’s Budget today. In his fourth Budget, Osborne announced the creation of a new allowance that means that 450,000 of the UK’s small businesses will be taken out of paying employer’s NICs all together.
Wed, 20 Mar 2013
A third of all employers will no longer pay employers’ National Insurance Contributions (NICs) as a result of Chancellor George Osborne’s Budget today.
In his fourth Budget, Osborne announced the creation of a new allowance that means that 450,000 of the UK’s small businesses will be taken out of paying employer’s NICs all together.
“I want to support jobs and the small businesses that create them,” Osborne told MPs in a boisterous House of Commons. As a result of the new allowance every business will be able to employ one worker on a salary of £22k a year, or four adults on the National Minimum Wage without paying any employer’s NICs through the deduction of up to £2,000 a year from their NICs liability.
“For the person who’s set up their own business, and is thinking about taking on their first employee – a huge barrier will be removed, “ Osborne told a packed House of Commons.
Employers’ NICs have often been described as a tax on jobs, and the announcement was quickly welcomed by the Federation of Small Business.
The announcement was part of a series of measures that that Osborne claimed as “a budget for an aspiration nation. Unless we fire up the aspirations of the British people… we are going to be outsmarted, out-competed and outperformed” by other countries, he said.
Other measures announced:
Responding, Labour leader Ed Miliband called the proposals “a downgraded budget from a downgraded chancellor”.
The Budget document is available in full via the HM Treasury website.
Check back on recruiter.co.uk for more Budget analysis tomorrow.
A third of all employers will no longer pay employers’ National Insurance Contributions (NICs) as a result of Chancellor George Osborne’s Budget today.
In his fourth Budget, Osborne announced the creation of a new allowance that means that 450,000 of the UK’s small businesses will be taken out of paying employer’s NICs all together.
“I want to support jobs and the small businesses that create them,” Osborne told MPs in a boisterous House of Commons. As a result of the new allowance every business will be able to employ one worker on a salary of £22k a year, or four adults on the National Minimum Wage without paying any employer’s NICs through the deduction of up to £2,000 a year from their NICs liability.
“For the person who’s set up their own business, and is thinking about taking on their first employee – a huge barrier will be removed, “ Osborne told a packed House of Commons.
Employers’ NICs have often been described as a tax on jobs, and the announcement was quickly welcomed by the Federation of Small Business.
The announcement was part of a series of measures that that Osborne claimed as “a budget for an aspiration nation. Unless we fire up the aspirations of the British people… we are going to be outsmarted, out-competed and outperformed” by other countries, he said.
Other measures announced:
- Corporation tax: Currently 24%, this will be cut to 23% next month (April 2013) and now to 21% in April next year.
- From 2014, no income tax to be paid on the first £10k of an individual’s salary.
- Reforming the tax system where avoidance behaviour is widespread, in particular strengthening obligations to ensure that the correct income tax and National Insurance is paid by offshore employment intermediaries, including a crackdown on those “who make a living from aggressively advising people to avoid tax”.
- Consulting on measures to tackle the disguising of employment relationships through limited liability partnerships (LLPs).
- Implementing recommendations made in the Richard Review on apprenticeship policy.
- Adopting many of the elements recommended in the Heseltine growth review.
- Abolishing stamp duty on shares traded on AIM.
- Start of a new single-tier State Pension in 2016-17, and simplification of the system.
- Further work on the Funding for Lending Scheme.
- Development of the business bank.
- Investment in infrastructure increased by £3bn a year from 2015-16. “By investing in the economic arteries of the country we will get growth flowing to every part of it”.
- Development of the UK shale gas industry.
- A Help to Buy scheme of support for home buyers designed to give a boost to the construction sector
Responding, Labour leader Ed Miliband called the proposals “a downgraded budget from a downgraded chancellor”.
The Budget document is available in full via the HM Treasury website.
Check back on recruiter.co.uk for more Budget analysis tomorrow.
