The Government has launched a new National Insurance contributions (NICs) holiday scheme this week to encourage new business start-ups in certain UK regions.
The 'Regional Employer NICs Holiday for New Businesses' scheme gives new firms in certain areas of the UK a 'holiday' from employers' NI contributions for each of their first 10 employees hired in the first year of the business. The break lasts for the first 52 weeks that the employee is in position.
The scheme is open to new businesses set up on or after June 22, 2010 and will run until September 5, 2013. It applies to start-ups in the North East, Yorkshire and the Humber, the North West, the East Midlands, the West Midlands, the South West, Scotland, Wales and Northern Ireland. It does not apply to firms in London and the South East.
The launch of the scheme follows other recent tax incentives announced in June's emergency budget, including a partial reversal of the previous government's plan to increase NICs by 1%
, and a 1% reduction in small firms corporation tax.
The Forum of Private Business welcomed the new scheme but is calling for further tax breaks to allow smaller businesses to be a catalyst for sustained economic recovery.
The Forum's chief executive Phil Orford said: "For years small business taxation has steadily increased, so this reduction in NI for some firms has to be welcomed. However, if the Government is serious about creating conditions for real economic recovery based on strong small business growth, it needs to introduce even bolder tax policies."