London business advisers today complained about an “opportunity missed” after the Chancellor failed in his Autumn Statement to offer a National Insurance holiday to encourage firms to hire new staff.
Businesses currently have to contribute 13.8% per employee. Business groups had hoped this cost would be cut for new staff to reduce recruitment costs. David Rankin, director at accountancy firm Harwood Hutton, said: “Cost of employment is a major issue for smaller businesses. Our clients had hoped for some relief that would enable them to end their hiring freeze. The Government has missed a big opportunity here.”
But there was good news for up to 270,000 of Britain’s smallest firms with a move that will help them avoid the need to hire accountants. The introduction of a “cash basis” form of accounting for small businesses filing self-assessment tax returns could help cut costs.
Firms currently have to adopt the “accruals” accounting, meaning debtors and creditors must be included. Switching to “cash basis” means firms need only include cash transactions that have actually occurred in a year. The move will cost HMRC £165 million. It will be available for businesses with turnover under the VAT-threshold of £77,000.
