Employers’ National Insurance Costs

As well as reductions in business rates and measures to reduce the impact of coronavirus on businesses, the Chancellors 2020 budget laid out several other plans that are expected to reduce the costs associated with employing people.

The employment allowance for national insurance contributions (NICs) will increase from £3,000 to £4,000 from April 2020.

The change means businesses will be able to employ four full-time employees on the National Living Wage without paying any employer National Insurance contributions.

The allowance will now have to be claimed annually and won’t be rolled forward as was previously the case.

The government will also introduce a “national insurance holiday” for employers of veterans in their first year of civilian employment. Employers will be able to claim this relief from April 2021. The holiday will exempt employers from any NICs liability on the veteran’s salary up to the Upper Earnings Limit. The government will consult on the design of this relief, although it gave no indication of when the consultation would take place.

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Employers’ National Insurance Costs