Cashback from HMRC . . . NO we’re not joking!
Last year HMRC announced that from 6th April 2014 every business, charity and CASC will be entitled to an annual “employment allowance” of £2,000. This little gem allows businesses to reduce their liability for Class 1 secondary National Insurance Contributions. What does this mean in plain English? It is actually a rebate for you, if you employ staff, to the tune of £2000 – yes, you have read it correctly; HMRC are giving back!
As always there are certain caveats that apply. Such as, if your company belongs to a group of companies or your charity is part of a charities structure, only one company or charity can claim the allowance.
Like all schemes and initiatives that involve tax and National Insurance, they are never simple and the devil is in the detail. We can’t change that and if we had a hand in designing tax laws, we would make them simpler and reduce tax rates for small businesses, rather than have one-off initiatives that create large gaping loopholes. Having said that, I am sure most business people will be grateful for a £2,000 rebate from HMRC, so maybe this initiative has some legs to it?
Please don’t miss out - talk to your local accountant. We don’t even mind if it’s not an AIMS Accountant, as long as you take advantage of the allowance.
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