5,000 pound benefit to Start ups

HMRC has announced a NIC holiday scheme to start on 6th September 2010, for all NEW companies that started trading on or after 22nd June 2010, and which will last for three years.  An eligible company will be able to withhold the first £ 5000 of employers’ NIC from the first ten employees in its first year of trading.

The P35 that the company submits will be for the full amount that SHOULD have been paid according to the payroll system, however they will actually pay a reduced amount each month.   This will cause an imbalance on the HMRC side of the account.   The employer will have to send a separate and manual return for the NIC holiday amount that should then balance the account.

Draft details of the scheme will be issued mid to late-August, and final details are scheduled before the scheme starts on 6th September.