Small Firms Would Employ More Staff If National Insurance Contributions were Reduced

Nearly a third of small firms would employ new staff if the Government reduced National Insurance Contributions (NICs), according to new figures from the Federation of Small Businesses (FSB).

The FSB’s Voice of Small Business Survey, with more than 1,700 respondents, shows that insufficient work and uncertainty over contracts (37 per cent), the state of the economy (33 per cent), cash-flow (31 per cent) and access to finance as well as the cost of credit (16 per cent) are preventing them from employing more people. 

With 2.46 million people out of work, the FSB believes that it is crucial that the Government provides incentives to help small businesses to take on staff and tackle unemployment.

Nearly a third (31 per cent) of respondents said that reducing NICs payments for the first six months of employment would encourage them to take on more staff, and 11 per cent said extending the NICs holiday scheme would be an incentive. 

The Government introduced a NICs holiday for start-ups that take on up to 10 employees in 2010, but the FSB believes this does not go far enough. The FSB is urging the Government to extend the NICs holiday to existing firms with up to four members of staff that take on up to three new employees. 

The FSB is also calling on the Government to help small businesses employ more apprentices and interns: 29 per cent of respondents said increased support would encourage them to take these on. 




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