Save £2,000 on your annual Employers National Insurance Contributions

With effect from 6 April 2014 every business, charity and Community Amateur Sports Club (CASC) will be entitled to claim up to a £2,000 reduction on their Class 1 secondary (Employer’s) National Insurance Contributions (NICs) each year.

The allowance was announced in the 2013 budget with the intention of encouraging business growth and employment and is expected to have most impact on small businesses.

The allowance will apply per employer, regardless of how many PAYE schemes they operate. Where a group structure exists or there is a connected party relationship only one allowance will be available and it must be claimed by a single employer and cannot be allocated across the group.

To claim the allowance the employer will be required to indicate their intention to claim through the Real Time Information (RTI) system.

Once the allowance has been claimed it will be offset against the total monthly employers NIC payment due until the £2,000 allowance has been fully utilised, or the tax year ends.

What does this mean for your business?

If you are currently paying over £2,000 per annum in Employer’s NIC you will benefit from the £2,000 saving.

If you are not currently paying over £2,000 per annum in Employer’s NIC then you could:

  • Potentially increase take home pay for Director-Shareholders without any additional income tax or employer NIC costs.
  • Hire a full time employee with a salary of up to £22,400 without any additional employer NIC costs.

If you would like further information or to discuss tax efficient extraction methods please contact Ann-Marie (ann-marie@dntca.com) or Fiona (Fiona@dntca.com).


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