From 6 April every employer business whether it is a company, a partnership or a sole trader can reduce the amount it pays for Employers’ National Insurance during the year to 5 April 2015.
The maximum you can get back is £2000 in the year. The way it works is, if for example you pay £1200 per month in Employers’ National Insurance for the month ended 5 May 2014 you don’t have to pay anything for the Employers’ National Insurance but you must pay over the Employees’ National Insurance contributions for the month ended 5 June you pay over £400 for Employers’ National Insurance and again you must pay over the Employees’ contributions.
From then on you pay the full amount. So you have paid £400 instead of £2400 in the first two months of the tax year.
You cannot claim this allowance for certain domestic employees. There are some other restrictions which you need to check do not apply to you but the vast majority of businesses will be better off.
If you operate through a company, you can get this £2000 against the Employers National Insurance on Directors’ salaries or fees. If you have been drawing a low salary from your company to avoid National Insurance, this opens up the possibility of a small tax saving.
Contact us for details.
