By Vivienne Russell | 14 October 2013
Legislation has been introduced in Parliament that will cut £2,000 from the National Insurance contributions paid by businesses and charities next year.
The National Insurance Contribution Bill will bring in the Employment Allowance, a measure that was announced in this year’s Budget and will largely benefit businesses with 50 employees or fewer.
As a result, around 450,000 businesses – or one-third of all employers – will be taken out of paying NI contributions altogether, the government said. Up to 35,000 charities are also expected to benefit.
Prime Minister David Cameron said: ‘Small businesses and entrepreneurs are the lifeblood of our economy and this government is firmly on their side.
‘An ambitious and thriving small business sector is vital for steering the economic recovery in the right direction and helping us to succeed in the global race.’
He added: ‘We are determined to do everything we can to ensure that our small firms can be successful and prosperous and people can fulfil their aspirations.’
John Allan, chair of the Federation of Small Businesses, said the Employment Allowance would have a ‘positive impact’ on small firms and the economy.
‘Our members have said they’ll spend the savings on their business, either through investing in the business, increasing wages or taking on staff,’ he said.
