Has everyone had their letter from David Cameron this week? Just in case you’ve been in a cave the last couple of weeks, there’s a new Employment Allowance that will give most businesses up to £2k a year off their employER’s national insurance bill. For some small companies this could mean you don’t pay any at all.
The allowance is to help us grow and employ more people. I can’t see many people rushing out to recruit staff on their £2k saving, but it’s a nice gesture. And I guess it could help with recruitment costs if you’re recruiting anyway.
To claim it is really simple, just tick the box on your payroll software, or make sure your payroll person does it, and you won’t pay any employers NI until you hit the £2k limit. Check your payroll report in week 1 or month 1 to make sure it’s been put through correctly.
Just you on the payroll?
If there’s just you in your business and you take your pay via a small monthly salary and dividends, then there’s a small benefit to increasing your salary to £10k to get the NI exemption – speak to your accountant about this if they haven’t contact you already.
There are a few exclusions – businesses that don’t qualify