Small firms handed £425m tax break to ease burden of hiring workers

Small businesses have been handed a £425million tax break to ease the burden on costs for hiring workers.

The Chancellor raised the employment allowance from £4,000 to £5,000 from April 6. 

The allowance allows eligible small businesses to reduce their employer national insurance contributions bills each year.

The increase in the allowance to £5,000 results in a tax cut of £425million for around 495,000 firms. 

And 50,000 of these companies will taken out of paying at all – taking the total that don’t pay the levy to 670,000.

The Federation of Small Businesses had praise for what it says is a major priority.

Chairman Martin McTague said: ‘We originally put forward the allowance as a targeted measure to help small firms, and it has now been expanded three times since its creation. 

With a cut to fuel duty, these measures will provide crucial breathing space for our embattled small employers.’