Government Grants Tax Cut of £200 per Employee
The government is set to introduce an employment allowance in April. This will result in a tax saving of £200 for each employee.
Thanks to this allowance, employers are set to save nearly £5.5 billion by the end of the current parliament, according to figures from the treasury.
The allowance will also reduce employers’ total National Insurance by £2000. From April, the threshold before businesses have to start paying National Insurance for employees will be raised. In April next year, National Insurance is also set to be abolished for employees under the age of 21.
The moves form part of the government’s ongoing support for small businesses. According to Chancellor George Osborne, “small businesses make a vital contribution to our economy, creating jobs and stimulating growth.”
Osborne went on to say that the employment allowance was “effectively providing cashback on jobs,” and would help both small businesses and the UK economy to succeed.