Firms ignoring government’s NI holiday plans

Elizabeth Fournier
THE NUMBER of UK businesses applying for a holiday from National Insurance Contributions (NIC) has fallen to a two-year low, with new figures showing just 400 firms expressed an interest in the scheme in December last year.

Applications fell by 44 per cent from the 710 received in the same month a year before, and there is little hope of an uptick before the scheme ends this September.

Introduced in the coalition’s debut budget in 2010, the policy allows start-ups outside London, the south east and the east to avoid paying NIC for their first 10 employees. At its height in October 2011 the scheme attracted 2,235 applications, helped by a marketing push that saw 144,000 letters sent to prospective beneficiaries.

But according to accountancy firm UHY Hacker Young, which compiled the figures, subsequent promotion has been minimal.

“Although the scheme was very generous and could have helped a lot of businesses, it was never given the promotion it deserved by the government and was perceived to be complicated,” said Roy Maugham, a tax partner at the firm.

Instead of the targeted holiday scheme, the government announced in this year’s Budget that from April 2014 all UK firms will get up to £2,000 off their NIC.