Start ups urged to claim NICs holiday ‘open goal’
A LEADING Chester accountancy firm says too many new firms are missing an ‘open goal’ by failing to apply for Government’s National Insurance Contributions (NICs) ‘holiday’.
Mitchell Charlesworth said under the measure introduced in the Chancellor George Osborne’s budget in June 2010 new businesses do not have to pay employers NICs of up to £5000 on the first 10 employees they hire in their first year of trading – a potential saving of £50,000. The NICs holiday is available to new businesses that start up during the period from 22 June 2010 to 5 September 2013.
However despite the attractions of the tax break, Mitchell Charlesworth associate and Start Up Division spokesman Paul Durrance said take up of the measure has been disappointingly low according to Government sources.
“The Government has just launched the Start Up Britain campaign in an effort to ramp up support for entrepreneurs,” he said. “In the cold light of day, while this all looks good for the Government, for a resource stretched start up firm it is a bewildering amount of information. Without specialist knowledge it would be easy to miss the real nuggets on offer and this NICs holiday is one of those nuggets. But we know already that the Government has been struggling to market the NICs holiday and is disappointed with the take up. So the message to start ups is to grab this opportunity. Find out from a financial expert if you qualify and go for it. It is important to point out there are criteria to meet and certain sectors have a limit in how much they can claim.”
Mr Durrance said that the fact take up of the NICs holiday is so slow is a cautionary reminder of the dangers of ‘DIY’ finances.
“Too many start ups cut corners on finance and miss out on all the help with saving tax and planning for growth that a good accountant can give,” he said. “Accountancy and tax is a devilishly complex area. It requires specialist knowledge to be understood. That is why here at Mitchell Charlesworth we have a specialist Start Up division whose services are run at a level a new business can afford. New firms who want to expand, grow and take on staff need month to month expert financial advice not just at the end of year accounts stage. This type of accountancy is totally inadequate for the ambitions of the business. We can help start ups grow by helping entrepreneurs from day one. We can work with you like a finance director, minimising your tax payments and planning your growth. Taking on staff is expensive and it really helps to have a knowledgeable finance team behind you to ensure you know exactly what impact employing staff is going to have on your profit and loss account.”