Small businesses are still turning their backs on the government’s National Insurance Holiday scheme, according to a recent report in the Daily Telegraph.
The NI holiday was introduced to encourage new start-ups to hire staff, but in the last quarter the number of businesses registering for the scheme actually decreased by 39%.
One of the main criticisms of the scheme is that it is not available to businesses in all areas of the UK. New start-ups in the south-east do not benefit from the scheme, which gives employers a 12 month holiday from paying NICs on the first ten people they hire.
The shadow business secretary, Chuka Umuuna, said businesses are put off by the complexity of the project. He told the Telegraph that the National Audit Office’s recent investigation into the Regional Growth Fund showed that the government’s growth policies are confusing and incompetent.
When the NI holiday was first introduced, the government estimated that 400,000 businesses would take advantage of it. So far, only 13,769 have used the scheme, way below target.
We keep hearing that the government wants to simplify taxation and make it easy for small businesses to grow; so why is it that every time they introduce a measure designed to help, it adds complexity rather than simplification? And why don’t they throw the scheme open to all businesses regardless of their location in the UK?