Employment Allowance Hailed As ‘Jobs Cashback’

The Chancellor has said the introduction of the Employment Allowance in April is effectively “cashback on jobs”.

The employment allowance – announced in last year’s Budget – will allow employers to claim up to £2,000 a year off their National Insurance bill. New Treasury figures show that by the end of Parliament, the cut to National Insurance contributions (NICs) will see businesses save almost £5.5 billion per year – or £200 per each member of staff.

George Osborne’s comments came as he toured two small businesses that will benefit from the changes, saying:

“Small businesses make a vital contribution to our economy, creating jobs and stimulating growth. The ones I have visited today want to expand, take on new staff and make new investments so the actions we have taken to cut the jobs tax will be a real boost to them. Effectively providing cashback on jobs, the Employment Allowance will help these businesses achieve their goals and help the UK succeed in the global race.”

The £5.5 billion a year figure was reached by also taking into account cuts in National Insurance contributions for employees aged under 21 from April 2015 as well as a move to reverse an earlier planned rise in the rate of NICs.

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