Welcome to the Great New Year NIC Giveaway

The take up of the National Insurance Holiday scheme that formed a key part of Chancellor George Osborne's first Budget is still way below the Treasury's initial estimates, the government has confirmed.

Exchequer secretary to the Treasury David Gauke released figures about the scheme to Parliament recently.  Just over 10,000 companies have taken up the scheme since June 2010.  The government had hoped for a take-up of 132,000 a year when it was announced by Osborne.

The holiday exempts qualifying new businesses in eligible regions from up to £5,000 of employer national insurance contributions for each of the first ten employees hired in the first 12 months of business.

It has received criticism because it is only available in certain regions.

Professionals have call for the scheme to be rolled out across the country.  HM Revenue & Customs say that they have sent around 140,000 personalised letters to all businesses that have registered for a PAYE scheme since June 2010 at a cost of around £90,000 in October.

The Exempted areas are:
Greater London (all)
The Eastern Region comprising:
The counties of Bedford, Cambridgeshire, Central Bedfordshire, Essex, Hertfordshire, Norfolk and Suffolk.
Luton, Peterborough, Southend-on-Sea and Thurrock.
The South East Region comprising:
The counties of Buckinghamshire, East Sussex, Hampshire, the Isle of Wight, Kent, Oxfordshire, Surrey and West Sussex.
Bracknell Forest, Brighton and Hove, Medway, Milton Keynes, Portsmouth, Reading, Slough, Southampton, West Berkshire, Windsor and Maidenhead and Wokingham.

2010 Coalition Budget

Here are a few of the changes brought in by Chancellor George Osborne's 2010 Coalition Budget.


Personal Tax Allowances
An increase of £1000 in allowances for 2011/12 for those <65 years old.

Tax Rates
The Basic Rate limit and the Upper Earnings & Profit limits for NIC have been reduced for 2011/12.

National Insurance
NIC Primary Threshold to increase from April 2011 plus a 1% increase in Employer Costs and Self Employed contribution.

Corporation Tax
Main Rate down by 1%.

Capital Gains Tax
Higher Rate Taxpayers to pay CGT at 28% after 23 June 2010.

VAT
Standard Rate of VAT increases to 20% from 4 January 2011.

If considering tax planning measures based upon the above we would encourage you to talk to us about the implications before making decisions.


For more information, please follow the links below
Walker Thompson
HM Treasury