Firms to get letters on #NIC holiday #tax returns
HM Revenue and Customs (HMRC) has said that employers who have successfully applied to join the Government’s NIC holiday scheme should be getting a paper national insurance return in the post during March.
Employers will need to complete the return and send it back to HMRC by 19 May.
Help for employers on completing their NIC holiday end of year returns will be available on the Business link website before the end of March, HMRC added.
Under the three-year scheme, which is aimed at encouraging private sector employment in areas hardest hit cuts in public spending, eligible new businesses can take a ‘holiday’ for each of the first 10 employees they hire in their first year of business.
Each holiday lasts for the first 52 weeks the employee is in their post (providing these weeks fall within the three-year holiday period).
New businesses that participate in the scheme don’t have to pay the first £5,000 of class 1 employer NICs due in the first twelve months of business, saving up to £50,000 in tax if ten employees are included.
The scheme is open to new businesses set up on or after 22 June 2010 and will run until 5 September 2013. Employers can benefit from the holiday deductions each time they are due to make monthly or quarterly payments to HMRC.
Most kinds of new employers are eligible for the holiday, provided they meet certain criteria, and most employees will also qualify, although there are some exceptions such as workers engaged through managed service companies.
The countries and regions which benefit are Scotland, Wales, Northern Ireland, the North East, Yorkshire and the Humber, the North West, the East Midlands, the West Midlands and the South West.
However, firms based in Greater London, the South East of England and the Eastern regions are exempt from the relief.