10/09/2010
As many as 400,000 new businesses could be able to reduce their tax bills after a new regional National Insurance Contributions (NICs) holiday came into effect yesterday.
According to BBC News, new firms set up outside of London, the South East and East of England are now eligible for a 'holiday' from paying staff National Insurance Contributions (NICs).
The idea behind the HM Revenue and Customs scheme is to encourage the growth of new business start-ups in the parts of the UK that rely most heavily on public sector employment.
Details of the NIC holiday were originally revealed in the June budget, but the government has now confirmed that up to 400,000 new companies now have the chance to save as much as 50,000 each.
The new scheme could act as a real shot in the arm for many small firms. A break from NICs combined with a cashflow finance solution such as invoice factoring could help free up funds needed to fuel growth.
Exchequer Secretary to the Treasury, David Gauke, hopes that the new scheme will provide an incentive for new businesses, and offer a timely boost for the UK economy.
"We need to rebalance our economy which has become reliant on public spending and jobs provided by the public sector," he said in a statement on HM Treasury's official website.
"The NICs holiday for new businesses in addition to cuts in corporation tax will provide a valuable boost to start up businesses and help foster the private sector led recovery that will drive growth in the UK over the coming years."
Joseph Jeffries