A recent report by HMRC has revealed that only half of businesses eligible to claim the new National Insurance Contributions (NICs) Employment Allowance have done so.
Introduced in April, the allowance offers businesses and charities up to £2,000 off their employer Class 1 NICs bill every year.
HMRC say employers can still claim the allowance for 2014–15 even though the tax year has started. HMRC will send a reminder to employers this autumn encouraging them to check eligibility and claim the allowance if they haven’t already done so.
HMRC point out that the allowance can only be claimed once for each employer (or group of employers) and not for each PAYE scheme, so even if an employer receives a reminder to claim the allowance, they must ensure they are only claiming once against one PAYE scheme, especially if the business runs multiple schemes.
According to the government, out of the 1.25 million employers eligible for the rebate, 725,000 employers across the UK had benefited from the Employment Allowance by the end of June.
Research by Sage also revealed that one in 10 small business owners had not checked whether they were eligible, and a further 2% said they had not made any effort to claim. This could mean that small businesses are missing out on up to £275 million which could be used to grow and expand their businesses.
Every business owner that had successfully claimed the money back described the process as ‘simple’ (100%), with nearly three quarters (73%) saying it was ‘very simple’. Jonathan Dowden, payroll category manager for Sage UK, said: "That extra £2,000 has the potential for a business to invest in new equipment, help pay off an overdraft, or pay for training for staff. This small amount can go a long way in giving small businesses the confidence to grow and expand."