Small firms would take on more staff if NIC were reduced

FSB calls on government to re-focus its policy for the smallest firms


Changes to the National Insurance Contributions (NICs) system would encourage hundreds of small firms to take on more staff.

That is the headline conclusion of a new survey from the Federation of Small Businesses (FSB), which demonstrates that small businesses continue to be stifled by long-standing challenges.

Of the entrepreneurs who responded to the survey, 31% said that, if the government were to reduce NIC requirements for the first six months of a new hire’s employment, it would encourage them to increase their staff roster.

Meanwhile, 11% said that an extension of the NICs holiday would provide a similar incentive to up their recruitment drive.

Among other reasons cited for not taking on staff, 37% of employers highlighted insufficient work and uncertainty over contracts 33% pointed to the state of the economy, and 31% alluded to cash-flow and access to finance.

John Walker, national chairman of the FSB says that while small businesses want to employ more staff, the “government must extend the National Insurance Contributions holiday to existing businesses if small firms are to take on new staff and so help tackle high unemployment.

“It is not only imperative that the government creates an environment for job creation, but that the banks lend to small firms and businesses are paid on time, to give small firms the confidence they need to grow their business and employ.”

In 2010 the government introduced NICs holiday for start-ups that take on up to 10 employees. However the FSB believes this does not go far enough, and is urging the government to extend the NICs holiday to existing firms with up to four members of staff, taking on up to three new employees.

 

 

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