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NIC incentive unlikely to offset public sector losses, warns IntaPeople

NIC incentive unlikely to offset public sector losses, warns IntaPeople
The Governments National Insurance Contributions (NICs) holiday, set up with the aim of driving business growth, is unlikely to compensate for heavy losses in the public sector, IntaPeople has said.
The specialist IT, Engineering and Legal recruitment consultancy issued the warning following the introduction of the break this week.
Under the scheme, businesses setting up outside of London, the South East and East of England are eligible for a holiday of up to 5,000 for the first ten employees they take on in the first year of business.
On unveiling the break, Exchequer Secretary to the Treasury, David Gauke, commented:
"The NICs holiday for new businesses in addition to cuts in corporation tax will provide a valuable boost to start up businesses and help foster the private sector led recovery that will drive growth in the UK over the coming years."
However, IntaPeople has questioned whether the holiday will provide enough of an incentive for aspiring entrepreneurs to develop their plans. Phil Handley, Operations Director at IntaPeople, said:
While we welcome the introduction of a National Insurance break for start-ups, were not convinced that it goes far enough. Given the uncertain economic climate and a prevailing fear that there may yet be more rises to come, a one-year National Insurance holiday is perhaps not as attractive as it first seems.
 More needs to be done to nurture business growth in the long term if the private sector is really expected to pick up the fallout from the public sector. Businesses need to feel confident that they will be supported by the Government for years to come, which is unfortunately not the case at the moment.
The NICs holiday came into effect on 6 September 2010 and will expire after 5 September 2013. The Government announced its intention to implement the National Insurance break in the last Budget on 22 June.


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