A new National Insurance contributions (NICs) holiday scheme to encourage new business start-ups in key UK regions has now been launched.
The ‘Regional Employer NICs Holiday for New Businesses’ offers substantial reductions in employer NICs for new businesses in those parts of the UK most reliant on public sector employment.
Under the three-year scheme, eligible businesses will be able to take a ‘holiday’ for each of the first 10 employees they hire in their first year of business. Each holiday will last for the first 52 weeks the employee is in post (providing these weeks fall within the three-year holiday period).
New businesses who take advantage of the scheme will be able to save up to £50,000 in employer NICs – £5,000 per employee, up to a maximum of 10 new employees.
Within the UK, the regions and countries that will benefit are the North East, Yorkshire and the Humber, the North West, the East Midlands, the West Midlands, the South West, Scotland, Wales and Northern Ireland.
The scheme is open to new businesses set up on or after 22 June 2010, and will run until 5 September 2013.
Launching the scheme, Exchequer Secretary to the Treasury, David Gauke, said:
“We need to rebalance our economy, which has become over reliant on public spending and jobs provided by the public sector.
“The NICs holiday for new businesses, in addition to cuts in corporation tax, will help provide a valuable boost to start up businesses, and help foster the private sector led recovery that will drive growth in the UK over the coming years.”