Nearly half a million UK businesses will benefit from a tax cut worth up to £1,000 starting from the 6 April 2022.
- Tax cut worth up to £1,000 for eligible businesses announced by the Chancellor at the Spring State.
- Increase in Employment Allowance from £4,000 to £5,000 benefits around 495,000 businesses which is 30% of all UK firms.
- Takes the total number of firms not paying the Health and Social Care Levy to 670,000.
The Employment Allowance has risen from £4,000 to £5,000 which now means smaller firms will be able to claim up to £5,000 off their employers National Insurance Contributions (NICs) bills.
This was announced by the Chancellor at last month’s Spring Statement to reduce employment costs, the change takes an extra 50,000 firms out of paying NICs and the Health and Social Care Levy. This increases the total number of businesses not paying NICs and the levy to 670,000.
Chancellor Rishi Sunak said:
“This tax cut for half a million businesses will help them thrive and grow to help drive our economic recovery.”
94% of businesses benefitting from the £1,000 increase are small and micro businesses and the sectors that will see the highest numbers of employers benefitting are the wholesale and retail sector, the professional, scientific and technical activities industry and the construction sector.
Today’s Employment Allowance change is one of a number of measures on offer to drive business growth, other measures include:
- 50% business rate relief for eligible high street businesses subject to £110,000 cash cap per business.
- Businesses benefiting from a temporary twelve-month 5p cut to fuel duty
- Help to grow programme is supporting SMEs to increase productivity and enhancing software and getting mini-MBA’s
Michelle Ovens CBE, founder, Small Business Britain, said:
“The Chancellor’s move to increase the employment allowance is welcome, and will certainty play a role in helping those businesses with employees deal with the huge cost-of-living challenges they are currently facing. In particular, it is good to see the immediacy of this rise in employment allowance, which will go towards helping businesses asap.”
Who We Are:
Swanson Reed is one of the UK’s leading R&D Tax Relief consultancies. We manage all facets of the SR&ED tax credit program, from claim preparation and audit compliance to claim disputes.
If you would like to find out more about how your business could benefit from R&D Tax Credit, contact a Swanson Reed R&D Tax Advisor today.