Treasury considers employers NIC break for under 25's

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Next month’s Autumn Statement could see the government abolishing national insurance contributions (NIC) for businesses which hire job seeking benefits claimants who are under 25 in a bid to cut youth unemployment levels, reports chartered accountants in Northampton Harris & Co.

The move has been proposed by the campaigning group Million Jobs and has the backing of several Conservative MPs.

Million Jobs argues that offering employers a tax cut like this would actually save the Treasury money, because the estimated £520 annual cost per young worker is less than paying them benefits via Jobseeker’s Allowance.

BDO tax partner Richard Rose said:

‘Rumours of the chancellor announcing an exemption from employers" national insurance for unemployed workers under 25 who are taken on by businesses are to be applauded as a step in the right direction to stimulate medium-sized businesses to grow, and in particular those that export. It will be interesting to see how long the exemption would apply for.’

‘Of course, a more structural reduction in employers" national insurance would be a more powerful statement of intent from any government to support business growth and a growth in jobs. As we approach the chancellor"s Statement on 5 December, the chancellor may give in to lobbying in this area to reduce employers" national insurance costs either by way of a rebate or holidays. Recent surveys have indicated that a reduction in employers" national insurance is the number one recommendation from businesses to encourage them to take on new workers’

 

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