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Call to extend NICs holiday to existing businesses

 

The Regional Employer National Insurance Contributions (NICs) holiday should be extended to help curb rising unemployment, a leading business group has said.

 

With the rate of UK unemployment continuing to rise, the Federation of Small Businesses (FSB) is calling on the Government to extend the NICs holiday to existing businesses.

 

The scheme currently provides new businesses in certain areas of the country with a break from paying employer NICs in respect of the first 10 employees that they take on in the first year of business.

 

It means that start-up businesses could potentially save up to £50,000 in employer NICs.

 

However, the FSB is campaigning for the holiday to be widened to existing businesses with up to four members of staff.

 

‘Unemployment is worryingly high and with inflation above target, small firms cannot rely solely on the consumer for growth,’ said the FSB’s National Chairman, John Walker.

 

‘We know that small firms would take on more staff if National Insurance was cut, so to really help boost employment in small businesses, the Government must extend the National Insurance Contributions holiday to existing small firms,’ he added.

 

Latest figures from the Office for National Statistics (ONS) show that UK unemployment rose by 44,000 to almost 2.5 million in the last quarter of 2010. The unemployment rate is now 7.9%, with youth unemployment running at 20.5%.

 

More information on the NICs holiday is available on the Business Link website.