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Applications for National Insurance holiday scheme plummet

Applications for National Insurance holiday scheme plummet thumbnail

New data shows that requests to join the Government’s National Insurance holiday scheme have reached an all-time low; a leading accountant says that the scheme has been poorly promoted.

A mere 400 businesses requested an NI holiday in December 2012 – a massive drop from the 2,235 applications processed in October 2011.

The scheme was one of the Coalition’s key policies when introduced in Budget 2011 – and it is generous to qualifying firms.

New businesses based outside the capital, South East and East of England are able to avoid paying employers’ NICs for the first 10 employees they take on – and is worth up to £5,000 per business.

Roy Maugham from UHY Hacker Young says that the scheme was “never given the promotion it deserved”, and many firms perceived it to be more complicated than it is in reality.

“When the Government did put effort into promoting the scheme, there was a brief surge in its usage. However, applications to use the scheme tailed off again once the Government’s burst of activity ended.”

The scheme is due to end in December 2013, and although the Chancellor announced a new incentive during the last Budget, to provide all businesses with an ’employment allowance’ of up to £2,000, Maugham says that it is not as generous as the scheme it effectively replaces.

The graph below shows the total number of applications for the NI holiday scheme during 2011 and 2012.

NIC Holiday

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