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NIC allowance ‘not reaching employers who need it most’

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From April 2014, the NIC employment allowance will come into force for UK businesses and charities, where NICs will be cut by up to £2,000. Included in the Budget 2013 to support the cost of employment for small businesses, it will allow 450,000 employers to pay no employers’ national insurance in 2014/15.

HM Treasury released data showing which UK regions and trade sectors will benefit from the new employment allowance. Statistics show the relief has most beneficiaries in London and South East: 142,000 small employers there will be taken out of paying employer’s NIC by the £2,000 reduction. On the contrary, harder hit areas like Scotland only have 33,000 employers taken out, the North East only 15,000 and West Midlands only 35,000.

Chris Blundell, tax partner at MHA MacIntyre Hudson, noted: ‘Although this initiative is a great boost for small employers, it hardly helps the ones who need it the most. It seems unfair that those who will most benefit from the cut in their NIC work in well-off London and the South East. The government needs to take measures to help the rest of the UK.’