Early Warning: 'Egg Timer' Running Out for Start-Ups Tax Break


Mitchell Charlesworth says start-up businesses must employ new staff no later than 5th September 2012 to fully benefit from the Government's National Insurance Contributions (NICs) 'holiday'.

Egg Timer Mitchell Charlesworth said under the measure introduced in 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 and begin employing staff during the period from 22 June 2010 to 5 September 2013.

However, Mitchell Charlesworth Start-Up Division spokesperson Paul Durrance warned that the tax break operates on a strict 12 month basis. To benefit from a full year of NICs savings, start-ups must have started employing staff at the latest, from September 2012 as the tax break finishes in September 2013.

"The message to start-ups is to grab this opportunity before it is too late," he said. "This is a very big tax break for entrepreneurs and it is vital to take full advantage of it.  It is important to point out there are criteria to meet. For example, it is only available to firms set up outside London, the Southeast and East England and certain sectors have a limit on how much they can claim.

It is also important to note that firms can also claim NICs back retrospectively right up until September 2013 if they were set up after 22 June 2010 and have not yet claimed for members of staff they employed in their first year of trading. We advise finding out from a financial expert if you qualify."

Paul Durrance urged start-ups to use an accountant which specialises in payroll as well as start-ups advice.

"Many accountants do not also offer a payroll service," he said. "To fully benefit from the NICs holiday and other tax planning measures it is advisable to use an accountant who can offer the complete accountancy service.

Too many start-ups cut corners on finance and miss out on help with saving tax and planning for growth. 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 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."

For more information, please do not hesitate to contact your local member of our Start-Ups Team today or complete a Quick Enquiry form before it gets too late.

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