the business ladder

Next week will see the commencement of the one-year National Insurance holiday for business start-ups, though there are concerns that many of the most deprived areas of the UK will be excluded from the scheme.

Only new business start-ups established between 22 June 2010 and 5 September 2013 outside Greater London, the South East and Eastern regions of the UK, will qualify for the scheme. It was announced in the Emergency Budget on 22 June 2010 and will take effect from 6 September 2010, effectively exempting qualifying businesses from having to pay employer national insurance contributions during their first year of operation.

Accountancy group UHY Hacker Young has warned that with many of the most deprived areas being located within the regions not covered, the scheme will fail to provide support to many of those areas that actually need it most.

Roy Maugham, partner at UHY Hacker Young, commented: “By restricting the scheme to regions outside London and the South East, the government is denying invaluable NICs savings to many of the businesses that would need them the most.”

In contrast, the scheme has been welcomed by the British Chambers of Commerce (BCC), who appreciate that targeting specific regions is the only feasible way to implement a national insurance holiday.

David Frost, Director General at the BCC, summarised: “There’s limited money and we need to stimulate growth and employment in the Midlands and the North. We can see the real benefit of targeting.”

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