In the Spring Statement, often known as the “mini budget”, the chancellor proposed new measures to help British households deal with the cost of living crisis.
Under pressure from charities, experts and opposition MPs, Rishi Sunak announced a reduction in fuel duties, an increase in the national insurance threshold and an increase in unemployment benefits for families and businesses in the UK.
But while raising the National Insurance threshold has been hailed by experts like Martin Lewis as a “good call” to help families and low-wage workers to afford rising food, fuel and energy prices, the move has alarmed business owners. faced with rising national insurance premiums. insurance premium costs.
Here’s what you need to know about the employment benefit, who is eligible for it, and how much it will increase in April 2022.
National Insurance: What is the National Insurance Threshold? How is NI calculated…
What is an employment benefit?
The Employment Benefit is a UK government regulation that allows small employers and charities to reduce their National Insurance Contributions (NIC) by up to £4,000 a year.
Under National Insurance requirements, employers are responsible for deducting employees’ National Insurance payments from their earnings.
The Employment Benefit allows employers to pay less to a Class 1 National Insurance worker for each wage, with the benefit ending when it expires or at the end of the tax year.
Eligible employers can claim up to £4,000 of their National Liability Insurance per year.
Who is eligible for unemployment benefits?
The Employment Benefit is available to businesses and charities that paid less than £100,000 in class 1 national insurance obligations during the previous tax year.
It is also open to employers of support and care workers, and those who are part of a group of companies or charities, with the benefit only available to the latter if the NI group’s combined liability is less than £100,000.
All eligible businesses and charities that may qualify for unemployment benefits for the last four tax years.
How much will unemployment benefits rise from April 2022?
The upcoming 1.25% increase in National Insurance has worried both British citizens and businesses, with the National Insurance primary threshold set to rise to 13.25% in April 2022.
In Rishi Sunak’s spring announcement, the chancellor eased concerns about a national insurance hike by raising the payout threshold and a similar increase in unemployment benefits.
From April 2022, unemployment benefits will rise to £5,000, adding £1,000 to the amount available to eligible employers as a buffer for National Insurance payments.
Speaking in the House of Commons on Wednesday, Mr Sunak said: “Today I am going to increase the unemployment benefit from April to £5,000.
“This is a new tax cut of up to £8,000 for the home of a million small businesses starting in just two weeks.”
The increase came after business representative bodies such as the Small Business Federation (FSB) urged the UK government to increase unemployment benefits to help businesses cope with the higher cost of national insurance.
Andrew McRae, political chairman of the FSB, said: “The chancellor’s action today will give small businesses in Scotland an inch of breathing room.
“The adoption of measures to increase unemployment benefits, as proposed by the FSB, will help local and independent enterprises cover part of the growing costs of maintaining jobs.
“And by lowering the duty on fuel, the UK government is helping every small business that depends on their car for their livelihood, like the village guide who drives a minibus or the plumber who transports his tools in his van.”