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NI Holiday still available for North-West Start-Ups

A year ago HMRC launched the voluntary National Insurance Contributions (NICs) holiday scheme, whereby start-ups in certain areas of the UK could take advantage of a break in paying NI for new employees. It was hoped this would boost private sector jobs in areas dependent on public sector employment, and stimulate growth in the UK economy.

The scheme, established in Autumn 2010 runs until September 2013, and can provide relief to new businesses of upto £5000 per employee, to a max of £50,000. However, annual data shows that just 1094 businesses in the North-West have taken up the scheme.

Would my business qualify for the NI Holiday?

Relief is not compulsory and businesses will need to apply for the holiday.

Eligible businesses

The types of business that may be able to apply for the holiday are:

  • a sole trader, company or partnership that begins to carry on a trade, profession or vocation
  • a property business or investment business
  • a new trading charity whether or not it is carrying out activities with a view to profit

Business start dates

If your business is eligible, the National Insurance contributions (NICs) holiday will run for 12 months after the date your business started.

During this time, the first ten employees you hire are potentially ‘qualifying employees’ for the purposes of this scheme. There’s more about what this means in our guide ’employer NICs holiday: calculating and recording’.

This 12 month period is limited by the previously mentioned end date for this scheme, so employer NICs due on earnings paid after 5 September 2013 cannot be withheld, no matter when your business started.

For the purposes of the NICs holiday, the date your business started will be treated as being the earlier of:

  • the date your business started to trade
  • the date when you first hired an employee

If, exceptionally, your business started to trade on or after 22 June 2010 but you first hired an employee before 22 June 2010, your business will be treated as having started on 22 June 2010. Remember, if your business started to trade before 22 June 2010, it is not eligible for the NICs holiday.

Businesses that do not qualify for de minimis State Aid

Some businesses do not qualify for de minimis State Aid and so cannot apply for the holiday. They are:

  • businesses in the coal sector
  • businesses in the road freight transport sector – where the aid is to be used to acquire road freight transport vehicles
  • businesses involved in export-related activities

How to apply

If you think your business meets the criteria for the NICs holiday, follow this link to find out how to apply. Employer NICs holiday: how to apply. Or speak to your McLintocks advisor today on 0845 680 7800.