Regional Employer NIC's Holidays for New Business Update

HMRC has now published more details of the Holiday scheme.

New businesses will be able to make NIC savings under the Holiday for earnings paid to employees on or after 6 September 2010. This will allow a deduction from the Class 1 NIC that employers pay to HMRC each month. New businesses that stared between 22 June 2010 and 5 September 2010 will also benefit provided they satisfy the eligibility test.

The NIC holiday applies to the first 10 qualifying employees taken on in the first year of business. The Holiday period will last for the shorter of employees first year of employment or time left until the Holiday scheme ends on 5 September 2013.

The Holiday will apply to all relevant earnings paid to a qualifying employee in the first year of employment to a maximum saving of £5000 in employer NIC for each employee.

Employers wishing to make use of the Holiday scheme need to make an application to HMRC when they take on their first employee. This application needs to be approved by HMRC.

To be eligible for the holiday to apply

• A new business starting between 22 June 2010 to 5 September 2013.
• The principal place at which the new business is carried on when it is started is not in an excluded region.
• Qualifying employees are engaged for the purposes of the new business.

Excluded Regions

• Greater London
• Eastern Region
  • Counties of Bedford, Cambridgeshire, Central Bedfordshire, Essex, Hertfordshire, Norfolk and Suffolk. 
  • Non-metropolitan districts of Luton, Peterborough, Southend-on-Sea and Thurrock.    
• Southern East Region
  • Counties of Buckinghamshire, East Sussex, Hampshire, The Isle of Wight, Kent, Oxfordshire, Surrey and West Sussex.  
  • Non-metropolitan districts of Bracknall Forest, Brighton and Hove, Medway, Milton Keynes, Portsmouth, Reading, Slough, Southampton, West Berkshire, Windsor, Maidenhead and Wokingham.   

Full details can be found here.