As the public sector face huge cutbacks freelancers, including umbrella company contractors, may be looking to the private sector for work opportunities. However, the private sector will be facing a massive task in order to boost the jobs economy. Alistair Cox, the Chief Executive of Hays, observed the possibility of more employment opportunities if the government had extended the NIC holiday to all areas in the UK
At the moment NIC holidays have been introduced only to the poorer areas which excludes Greater London, the UK’s Eastern regions and the South East. Businesses which commence between 22 June 2010 and 5 September 2013 will qualify for the exemption in their first year of trading. The NIC holiday was introduced in the emergency budget held in June 2010, and commenced 6 September 2010. New businesses are able to claim a £5,000 exemption for each of the first ten employees.
Mr Cox accepted that the inclusion of all UK areas was unlikely in the face of many cutbacks and problems facing the economy. There is still a concern that the scheme will fail to be beneficial to many areas that need the relief. Some of the most deprived areas in the UK are in regions that are excluded from the scheme, meaning that some of the businesses who need support the most will not receive it.
Partner in UHY Hacker Young, Roy Maugham, confirmed that by restricting the NIC holiday to certain areas, the government were denying help and savings to vulnerable businesses.
However, the British Chamber of Commerce disagree saying that the scheme will only work if it is restricted to certain areas. The Director General of BCC, David Frost said:
“There’s limited money and we need to stimulate growth and employment in the Midlands and the North. We can see the real benefit of targeting.”
If the NIC holidays are a success, umbrella company contractors could see a rise in opportunities as new businesses are encouraged.
