Treasury considers employers NIC break for under 25's

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’