Only 10,000 companies avail of National Insurance Holiday

The government has confirmed that the National Insurance Holiday scheme is still not being used by anywhere near as many businesses as it had hoped. This news could prompt accountants to extol the financial benefits of the Holiday to their clients.

Last month, David Gauke, the Exchequer secretary to the Treasury, told parliament that just over 10,000 firms had taken up the offer of the scheme since its inception in June 2010. The government had expected around 132,000 companies a year would take advantage of the break.

Under the NI Holiday scheme, eligible businesses are exempt from paying up to £5,000 in employers national insurance on the wages of each employee hired in the first 12 months. The scheme applies to the first ten employees only.

However, professionals have criticised the scheme because it is not available in all parts of the country and they would like to see it rolled out to all regions so that businesses can obtain the benefits.

Since June 2010, HMRC has sent personalised letters to around 140,000 businesses that have newly registered for PAYE at a cost of approximately £90,000.

Meanwhile, the Accounting Standards board has set out its proposals for reforming income tax financial reporting.

The board said the current method of reporting is over complicated because the effects of transactions do not necessarily correspond to the period in which they are reported. One way around this, the board suggests, would be to adopt a flow-through approach whereby a portion of the tax on taxable income is reported and the other portion is deferred.

© 2017 All rights reserved. Reproduction in whole or in part without permission is prohibited. See our copyright notice.

Tags: , , , ,

Leave a Reply