The Budget announced a welcome break for new businesses outside the South East, that of a National Insurance Holiday giving new companies the chance to take on employees, the first 10 of which will not have employers NIC due for the first 12 months, giving a potential saving of £50,000 BUT and it is a big but for new businesses. The Budget statements have been released and alluded to the fact that new businesses from 22 June 2010 would potentially qualify but the scheme itself was unlikely to be ready until September – so immediate confusion caused – qualifying companies from 22 June but scheme not ready until September so many new businesses are thinking that the NIC holiday will apply to them if they set up business after 22 June – yes and no – not all companies will qualify (exclusions on fishing, agriculture and mining already mentioned) but the NIC holiday CAN’T start until the scheme officially starts, so even if you set up a company (and are trading) in the period 22 June to official scheme start up you CAN’T apply the NIC holiday, you need to operate the “normal” NIC rules and this may catch out a lot of new businesses. The NIC holiday will start when the scheme officially starts whether it be September of another future date. It is important that companies do not fall foul of this rule as penalties are drachonian. If you are in any doubt contact the employment tax expert