Research from the Federation of Small Businesses (FSB) suggests that extending a National Insurance Contribution (NIC) holiday could create thousands of jobs in the UK, hrmagazine.co.uk reports.
The NIC holiday scheme is currently being offered to a limited area outside London and the South East of England. It allows them to take on up to ten employees without having to pay their NIC.
Initially expected to create 27,000 jobs and contribute £700 million to the British economy, only a small proportion of eligible firms have adopted it. However, the FSB claims that if the scheme were opened up to all ‘micro-firms’ in the UK over a two-year period, it could add 45,000 jobs and around £1.3 billion to the economy – perhaps assisting those who want to start a franchise to staff it in a cost-effective way.
Funded by the government, the FSB believes that a UK-wide scheme could be implemented for £500 million less than the original, taking into account the savings that the extra jobs would create.
FSB national chairman, John Walker, told egovmonitor.com: “The NIC holiday is the government’s flagship policy to boost employment, but it hasn’t anywhere reached the levels that were predicated.
“Extending the scheme will involve a financial outlay by the Government, but having more people to work will increase tax revenues in the long run as more people are paying tax than receiving help from the state through Jobs Seeker’s Allowance.
“Getting people into full time work will mean they have more money to spend, increasing revenue from VAT,” he added.