We're all going on an NI holiday

In the Emergency Budget the Chancellor announced the Regional Employer National Insurance Contributions Holiday.

The Coalition Government intends to introduce a scheme, to become law in early 2011, to help certain new businesses where the 'principal place of business' is not in Greater London, the Eastern or South East Regions.

The scheme is intended to apply to businesses commencing on or after 6 September 2010, with transitional rules for those which commenced on or after 22 June 2010.

Broadly, for businesses commencing within the three-year qualifying period, employers will not have to pay the first £5,000 of Class 1 employers' NIC due in the first twelve months of employment. This will apply to each of the first ten employees hired in the first year of business. The relief can be by way of a reduction in monthly/quarterly payments of employers' Class 1 NIC or by refund.

There are various anti-avoidance rules to prevent businesses ceasing and restarting and for companies which fall within what are known as the 'IR35' or Managed Service Company regimes.

The Business Link website contains application forms and further guidance.

One point to note is that the scheme will not become law until 2011. To quote from the guidance:

'The Holiday will be introduced in a National Insurance Bill in the Autumn and is expected to receive Royal Assent in early 2011, when it will become law. Until that time, businesses eligible for the Holiday will, as a result of the exercise of HMRC Commissioners' collection and management powers, be able to receive the benefit of the Holiday from 6 September 2010.

New businesses which choose to participate in the scheme in advance of it becoming law should note that if the draft … is not enacted in substantially the same form they will be required to pay over to HMRC by 19 April 2011 any contributions that they have withheld which remain due.'

So, wait and see may be the best option in the near future.

Links: HMRC NI holiday guidance Business link application

Our other services...

Financial Accounts Financial Accounts

We can help with the preparation of accounts for all types of business. Whether you are a Sole Trader, Partnership, Limited Company, Limited Liability Partnership or a Charity, AGP has the expertise to deal with you. We help you fulfil all your obligations with HMRC, Companies House and any other regulatory body that you are required to report to.

Audit Audit

An audit provides a high level of independent assurance of the financial position and results of an organisation. This gives shareholders confidence that the reported performance of the business is accurate as well as providing external users with certainty that the accounts show a true and fair view. An audit lends credence to the company accounts in a number of ways.

Tax Planning Tax Planning

It is important to ensure your tax planning reflects any changes to your circumstances which is why we work very closely with all our personal clients. AGP are trusted to manage tax efficiently. Sometimes just a simple review of your personal tax circumstances can reveal significant tax saving opportunities which can be realised quickly and at minimal cost..

Payroll Services Payroll Services

AGP can become your own part-time Payroll Manager. An expert who knows the complexity of the relevant legislation inside out and for a fraction of the cost of an internal manager. Why not outsource this obligation and spend the time saved doing what you do best, running your business?

Corporate Taxation Corporate Taxation

Corporation tax can be a huge outgoing for your company if it is not managed correctly and planned appropriately. You can trust AGP to employ a holistic approach to your tax planning whether you are a medium sized SME, an international organisation or a small owner-operator.

Management Accounts Management Accounts

Management accounts allow business owners to exert a far greater degree of control over their business, recognising and addressing problems and identifying opportunities soon after they arise.

Bookkeeping & VAT Bookkeeping & VAT

When running a business, priorities are often focused on the operational side of your business. Bookkeeping & administration can often be put off until it becomes quite a major task. By taking advantage of our bookkeeping service, we can take this problem away so you can get on with running your business while we manage your accounting books.

Company Formation Company Formation

We take away the hassle. Whether starting a new business or restructuring an existing one, our extensive knowledge of company formation means we can advise you on the merits and possible pitfalls of incorporation.

Contractor Accounts Contractor Accounts

We have a wealth of experience in the contractor market and as a result there are not many firms of Chartered Accountants that can claim they know the contractor industry as well as AGP. This leads to a number of benefits.