Government gears up for April roll-out of Employment Allowance

admin2 January 19, 2016 0
Government gears up for April roll-out of Employment Allowance

The Employment Allowance will become part of workplace law from April 6th. This new law gives all charities and businesses a £2,000 allowance that will cut their National Insurance contributions (NICs) expenses.
As many as 1.25 million different employers will benefit, with 98% of all savings going to firms with less than 250 workers. It is estimated that as a result of the Employment Allowance, 450,000 employers will not be liable to pay any NICs in 2014 to 2015.
The Employment Allowance forms part of UK law reviews that are intended to reduce the burdens businesses face through workplace law and should help companies grow and prosper in a challenging economic environment.
With less than two months to go until the new workplace law takes effect and NICs begin to fall, HM Revenue & Customs has provided employers with tax guidance. This guidance document informs employers which employers can claim the Employment Allowance and which employers are excluded, and details how employers can go about claiming Employment Allowance. The guidance notes that the process of claiming Employment Allowance will be simple and can be easily done through a firm’s payroll providers.
Although the new workplace law is still subject to UK law reviews and parliamentary approval, the government is examining how to ensure the policy receives the take-up it is hoped to have.
During the beginning of February, Chancellor of the Exchequer George Osborne visited the Yorkshire districts of Keighley and Halifax to tell small businesses about the new tax allowance through workplace law. He went to Dean Clough Mills in Halifax, which is now the home of around 150 enterprises, as well as Advanced Actuators, which supplies valves to nuclear, water, power, and oil and gas companies. Finally, he visited local art cafe Cobbles and Clay.
Mr Osborne explained that the tax cuts are intended to encourage businesses to invest in jobs, and should affect every enterprise in the company.
This should help to provide hardworking people with “greater economic security”, he added.
Federation of Small Businesses National Chairman John Allan revealed research conducted by his organisation found that 24% of small enterprises will use the Employment Allowance to invest in resources, 28% will use it to take on extra staff and 29% will use it to increase the wages of their staff.
Some employers will be excluded from the Employment Allowance, for instance those who employ people for domestic or household work, public authorities and companies that perform functions of a public nature. Managed or Personal Service Companies that do not pay out wages or salaries but instead pay out contract fees will also be exempt, as will some service companies.
Employers who are unsure about whether or not they can claim Employment Allowance and that have looked on the guidance should speak with an expert in UK workplace law for more information.
Hellen works alongside unions and health and safety representatives to drive down the number of injuries and accidents at work compensation. He is also a keen student of UK employment law and keeps an eye on any UK law reviews so he can keep on top of any movements in the area.

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