Since April, the government has presented Britain’s small businesses with the opportunity to save money by applying for Employment Allowance – a National Insurance Contributions rebate worth up to £2,000 in annual savings per firm.
Four months on and it appears that many SMEs have not applied. According to new research published by accounting software company Sage UK, businesses could be missing out on as much as £275 million as a result.
It is estimated that around one in ten small business owners have not applied for the Employment Allowance. Whether this is because they were not aware of it or decided it was not worth applying for is unknown.
While 89% of companies questioned said they had claimed the money, 9% admitted to not checking beforehand to see if they were actually eligible for the tax break. On top of this, 2% of those surveyed said they had not made any effort to claim.
Millions of pounds waiting to be claimed
Jonathan Dowden, Payroll Category Manager for Sage UK, said: “Although this is only a small proportion of businesses, the huge number of eligible firms means there is millions of pounds sat in the bank waiting to be claimed.
“That extra £2,000 has the potential for a business to invest in new equipment, help pay off an overdraft, or pay for training for staff. This small amount can go a long way in giving small businesses the confidence to grow and expand.”
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.