Cameron concedes NI holiday flop February 2012
Posted date: 31 January 2012
David Cameron has admitted that the National Insurance (NI) holiday for new businesses was not as successful as he had hoped.
The Treasury has revealed that only 10,000 companies have taken up the scheme which provides a deduction of up to £5,000 from employer NI contributions. The Government had forecast that 400,000 firms would take advantage of the tax break, helping to drive growth and boost employment.
The initiative applied to the first 10 employees during the first 12 months of the business, or from when the first member of staff was hired.
The Prime Minister made the admission during a PM Direct question time at Intuit in Maidenhead.
“The scheme has not worked as well as we hoped,” he admitted. “It was too complicated and too targeted at specific businesses. It resulted in around 1,000 jobs but that was not enough.”
Treasury figures also revealed that the cost of administering the programme was £12 million – double the amount provided to support employer NI contributions.
For more information please see NI Holiday.
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- February 2012
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