Owner Managed Businesses (OMBs) are sceptical or unaware of the benefits of the Government’s new Employment Allowance initiative, which launched on 6th April 2014.
The initiative will help employers reduce the amount of National Insurance contributions they pay for their employees by up to £2,000, but almost a third (30%) are completely unaware of the change. This means that thousands of businesses may lose out on tax breaks that could be used to reduce costs or improve wages.
More than 4 in 10 small businesses (44%) say that although the Government’s new Employment Allowance is a welcome reduction in costs it will not make a significant impact on their business, according to the latest OMB Barometer from Bank of Cyprus UK.
The research also found that well over half (56%) of small businesses are not intending to hire more staff over the next three months, a similar figure to the last report in December 2013 (54%).
Tony Leahy at Bank of Cyprus UK commented: “At a time when small businesses need Government support to help nurture them through a fragile economic recovery, it is a concern that a significant percentage of businesses are not aware of this initiative. When cash flow is tight for businesses, the Employment Allowance presents an opportunity for OMBs to reduce their costs, reinvest the money they save in underfunded areas of their business, or give a boost to salaries for existing staff in order to improve morale and retention”