The Government’s new Employment Allowance initiative to reduce National Insurance payments for small businesses was launched on April 6th – aiming to cut contributions paid for employees by up to £2,000. However research carried out by the Bank of Cyprus UK shows around a third of eligible businesses are completely unaware of this.
These changes are designed to help smaller businesses reduce costs, improve wages and feel more encouraged to take on more staff.
According to the findings in the Bank of Cyprus’ report, 30% of business owners do not know about it and 44% believe this allowance will not have any significant impact on their company. It was also found that 56% of small business are not intending to hire any more staff over the next few months; a similar figure to the same time last year (54%).
Tony Leahy at the Bank of Cyprus UK said: “At a time when small businesses need Government support to help nurture them through a fragile economic recovery, it is a concern that a significant percentage of businesses are not aware of this initiative.
“When cash flow is tight for businesses, the Employment Allowance presents an opportunity for business owners to reduce their costs, reinvest the money they save in underfunded areas of their business, or give a boost to salaries for existing staff in order to improve morale and retention.”
How to make a claim for Employment Allowance
Tax reductions are available for nearly all employers that pay Class 1 National Insurance contributions, including businesses, charities and community amateur sports clubs. Claims for Employment Allowance can be made through payroll software. For further instructions and details on the eligibility criteria, visit the gov.uk website.