Budget 2013: 450,000 small businesses ‘will pay no jobs tax’

In a dramatic move, the Chancellor George Osborne has promised to take the first £2,000 off the national insurance bill of all employers, meaning that almost half a million businesses will pay no national insurance contributions at all.


In a dramatic move, the Chancellor George Osborne has promised to take the first £2,000 off the national insurance bill of all employers, meaning that almost half a million businesses will pay no national insurance contributions at all.

Describing the new Employment Allowance as ‘the largest tax cut in the Budget’, Osborne said the cost of employing people is a burden on small firms ‘and it is a real barrier to taking an extra person on’.

He claimed ‘a third of all employers in the country’, or 450,000 small businesses, would now pay no employer’s national insurance contributions as a result of the move. Said Osborne: ‘For the person who’s set up their own business, and is thinking about taking on their first employee – a huge barrier will be removed. ‘They can hire someone on £22,000, or four people on the minimum wage, and pay no jobs tax.’

He added the allowance would also be available to charities and community sports clubs. The move was welcomed by John Walker, national chairman of the Federation of Small Businesses, who said, ‘The Budget opens the door for small businesses to grow and create jobs.’

Walker added that other measures in the Budget would help small businesses, including the scrapping of the 3p fuel duty rise in September and the measures introduced to help first-time buyers on to the housing ladder, which he said ‘would reinvigorate the construction sector’.

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