Update due to Covid-19: As a result of Covid-19 there have and will continue to be daily updates and changes to legislation such as employment regulations and allowances. One such update is the Covid-19 Job Retention Scheme, you can read more about this here.
The 2020 Budget has confirmed that the National Insurance Contributions (NICs) Employment Allowance will be increased from £3,000 to £4,000, with effect from April 2020. It has been estimated that 510,000 entities will benefit from this change, with approximately 65,000 entities which will be taken out of paying NICs entirely (based on HMRC analysis of PAYE Real Time Information).
The impact of lower National Insurance costs will particularly help small businesses and charities to afford the costs of staff and contractors to support their work.
HMRC analysis suggests that, from April 2020, 650,000 businesses will have been taken out of paying NICs since the Employment Allowance was introduced in 2014.
The NICs Primary Threshold for employees and Lower Profits Limit for self-employed individuals respectively, have increased to £9,500 from April 2020. Charities will benefit from a continued increase in NIC exemption as the Primary Threshold for employees and Lower Profits Limit for self-employed individuals have increased from £8,632 to £9,500.
There has also been a commitment to introduce a National Insurance holiday for employers of veterans in their first year of civilian employment, which could be of particular assistance to charities and not for profits which provide employment opportunities specifically for veterans
Read more on the Budget here.