Could you slash your National Insurance Contributions bill?

Exchequer Secretary to the Treasury David Gauke tells Wholesale News that important changes to National Insurance Contributions will put extra money in wholesalers’ pockets. Lisa Moore explains

As many as 63,000 businesses in the wholesale sector could benefit from sweeping changes to National Insurance Contributions, with as many as 13,000 seeing their employer NICs bill completely wiped out.

On April 6, 2014 the Government will introduce the new Employment Allowance, which it says will benefit up to 1.25 million employees across the UK and give businesses, including wholesalers, up to £2,000 off their employer National Insurance Contributions (NICs) bill – the tax businesses pay on their employees.

“Around 450,000 businesses – that’s a third of all employers – will no longer pay any National Insurance Contributions at all as a result of the Employment Allowance. This will free up money which you might choose to use to purchase new equipment or technology or, if you’re aspiring to grow, take on your first employee or take on an additional member of staff. The Employment Allowance could provide you with the extra boost needed to achieve this,” Gauke told Wholesale News.

“The Government’s long term economic plan is working and we are beginning to see the economy recover. We believe that backing business is the only way to grow our economy, create jobs and deliver a more secure future for everyone in Britain. Part of our plan is our commitment to helping small businesses who have played such a vital role in contributing to economic growth and job creation. By introducing this allowance, not only are we supporting these valuable businesses, we are taking a bold step towards the UK becoming the best place in Europe to start, finance and grow a business.”

He added that wholesalers play an important role in ensuring businesses can serve their customers and in contributing to the economy so the Government wanted to recognise the part the sector and others have played in securing the UK’s recovery.

“We are making it really simple for businesses to claim – you will be able to do it using your normal payroll software and Real-Time Information and although this will depend on your package, it is likely to be no more than ticking a box. If you choose to take up the allowance, following April 6, when you go to run your payroll, HMRC will ensure your entitlement is deducted from your employer NICs bill.”

Additional information about eligibility and how wholesalers can claim is available on the Government’s website and, in order to help businesses work out how much they might save, there is an Employment Allowance calculator. This will illustrate the effect of the allowance on the NICs bill and can be accessed at

Concluded Gauke: “Open to businesses in the UK, regardless of age, size or location, the allowance could bring real benefits to businesses. A business employing one person on a salary of £22,400 won’t have to pay any employer NICs at all. Alternatively, they could employ four adults on the national minimum wage without paying any employer NICs.”

*Check next month’s Wholesale News for our Budget round-up and trade reaction.


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