Business News

National Insurance Contributions stop SMEs hiring staff

Filed under: Small Business News — Alan @ 2:38 am

Small businesses would hire new staff if the National Insurance Contributions (NICs) were reduced by the government new figures reveal from the (FSB) Federation of Small Businesses. There are over 2.4 million people unemployed so the FSB says it is crucial that incentives are provided by the government to aid small businesses to hire staff and help lower unemployment.

FSB Reading & West Berks’ chairwoman Nicky Goringe said, the FSB has long said small businesses would be able to take on employees if there was a reduction of the National Insurance Contributions, adding that incentives are needed for small businesses even though they need to employ.

The holiday for National Insurance Contributions needs to be extended by Government to existing small firms if they are to employ new staff to help the high unemployment. The FSB says payments that are from other firms are stifling small firms as well as the lack of banks willing to finance have forced some to close.

The Chancellor gives, but also takes from SMEs

Filed under: Small business — Alan @ 6:55 am

Leaders of many of Britain’s small companies have stated that the national insurance rate increase attacks jobs and will hinder the growth rate of Britain as it comes out of the recession.

The FSB or Federation of Small Businesses stated that Chancellor Alistair Darling has effectively taken away with the same hand he gave out after he deferred a one pence increase on SMEs corporate tax, but then hiked the contributions of small businesses to national insurance by about half a percent.

The move to defer the corporation tax will help out about 850,000 SMEs, but the move to increase national insurance will hurt companies and increase the rate of unemployment since companies will not be able to afford new or possibly current employees.

Chairman of the FSB, John Wright, stated that the new tax will hurt the UK’s employment rate and that since the unemployment is on the rise it is not excusable for the government to use national insurance tax hikes as a way to get revenue.  Instead, Wright stated that SMEs should have been rewarded for hiring new employees to encourage job creation.

The new point hike is on top of a previous rate increase from 2008 that affects all SMEs, their staff, and those who are self employed in Britain.  Workers who earn less than twenty thousand pounds a year will be exempt from the tax hike however.

Darling also announced in his pre-Budget report that the Enterprise Finance Guarantee scheme will be offered for another year.