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National Insurance Contributions

Question for Treasury

UIN HL3464, tabled on 26 October 2021

To ask Her Majesty's Government what steps they are taking (1) to increase the employment allowance, and (2) to reform upfront costs, such as business rates.

Answered on

9 November 2021

The Employment Allowance (EA) reduces National Insurance contributions (NICs) bills for businesses and charities by up to £4,000 per year. This applies to those whose employer Class 1 NICs liabilities were less than £100,000 in the previous tax year.

Since 2014, businesses and charities throughout the UK have been able to claim the EA, and over 1 million employers benefitted from this relief in the year 2020/21.

The Government has already significantly increased the EA and does not have plans to increase it further. The Government raised the EA from £3,000 to £4,000 in April 2020, benefitting 510,000 businesses. This followed the increase from £2,000 to £3,000 in 2016, meaning the value of the EA doubled in four years.

The Business Rates Review concluded at Autumn Budget 2021 and set out significant new measures to reduce the burden of business rates by £7 billion over the next five years.

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