The ‘Regional Employer NICs Holiday for New Businesses’ scheme has come into force in some areas across the UK. The Forum of Private Businesses has welcomed this scheme, however they believe that the scheme does not go far enough if the end aim is economic recovery.
This scheme allows start-ups in Scotland, Northern Ireland, Wales, the North East, North West, Yorkshire and the Humber, South West and West Midlands to have an NIC holiday for their first ten employees for the whole year.
However, the government has also announced extensive public sector cuts and have confessed that they are looking to the private sector to develop job opportunities and economic growth over the coming years. As such, the FPB believes that there should be further tax incentives as disproportionate tax could threaten businesses rather than supporting them to thrive.
FPB chief executive Phil Orford commented: “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.
He continued: “Given the significant threats to cash flow and business growth from issues such as a lack of bank finance and increasing late payments, recruitment is likely to be slow during the first 12 months for many new firms. The scheme should be available for a longer period than just the first year they are in business.”