8th September 2010: NIC Holiday for New Business Start Ups

New businesses can start to claim the NIC holiday from contributions for their first 10 employees, up to a maximum of £50,000.

Businesses in the Regions

The new start up businesses must be outside London and the South East and East of England to enable them to qualify.  Qualigying businesses could be sole traders, companies or partnerships that are trading, as well as property and investment businesses.  Charity trading arms will also qualify but Managed Service companies will not.

First 10 New Employees up to £5000 Each

The relief applies to the NIC on the first 10 employees they take on.

New Businesses

The relief is aimed at businesses that commenced between 22nd June 2010 and 5 September 2013.  The date your business starts is important as the NIC holiday will run for 12 months from this date.  It will be the earlier of either the date your business began trading, or the date you hired your first employee which is used to contest you for the relief.

You will need to confirm that HMRC consider your business as a new start up, and that it has not just changed ownership or was part of another established business.

State Aid Businesses may not Qualify

Most new businesses should qualify, however Europe's State Aid rules can prevent or limit this relief in the coal, agriculture fisheries and road transport sectors.  Again, it is important to confirm with HMRC.

Claiming the NIC Holiday

New businesses will need to register with HMRC by completing an application form.  There will also be an online application process.  The employer must calculate NIC in the same way as normal, and keep and preserve any documents and records relating to entitlement for each qualifying employee.

HMRC will provide recording sheets online that can be saved by employers.