The Budget: Another (Even Bigger) Freebie For Employers
The budget provided yet another freebie for employers, as an expert accounting service we can help to break it down into an easy to understand way.
In April 2014, there was a freebie handed out to around 1.25 million employers, in the form of an “Employment Allowance”. This is where the first £2,000 of Employers’ National Insurance is discounted.
The theory was to reduce the Employers’ NI bill to zero when they employ four people full time at national minimum wage.
From 6 April next year, this allowance is being raised by 50% to £3,000 which will further help small employers.
One rule that’s not been widely passed around however, is that for one director/employee businesses, this allowance is being removed. From April, directors of one-man businesses who have been paying themselves at the level of the basic Personal Allowance to make use of some of the Employment Allowance will need to bring that to an end.
Having read through the budget in some detail, I can’t see anywhere that specifies whether the other employee needs to be paid a certain amount or work a certain number of hours – but I expect that we’ll find this out at some point soon.
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