Employers NIC Holiday

zara5034

Just out of interest, has anyone on this forum had any experience of The Employers NIC Holiday?

It seems that only 3000 new employers have taken up the incentive, far less than the 132,000 originally estimated.

So far, none of my clients have been eligible. I get the impression that it's not very well advertised or easily understood by new employers.

Any thoughts?

Gem7321

One of my bookkeeping clients applied for it (not on my advice), HMRC confirmed they were eligible, and I had to contact them and say actually no they're not as they are a subsidiary. It seems they don't even know much about it themselves. I have no other eligible clients.

Rozzi Rainbow

I've found that when we register our clients as new employers, HMRC send an information sheet about the Employer's NICs holiday in with the PAYE reference numbers. Only one of our clients has qualified for it so far, and there's quite a bit of work to keep track of how much is being reclaimed per employee and report the employer NICs not paid, but I think it's a good thing and she's saving quite a bit of money on it.

I agree that HMRC don't seem to know much about it, I rang the Employer Helpline to get confirmation of the reporting requirements at year end, and the person I spoke to didn't know anything about it! They did get someone to ring me back very quickly though who answered all my questions.

zara5034

Just wanted to bring this thread back to life as I have a NIC Holiday Query.

If an employer buys a business that was previously trading, does that mean they are not entitled to the NIC Holiday? From what I understand, if they take over a going concern, then they are not entitled, in my case, the previous owner ceased trading so the business was closed for several weeks.

Any help would be greatly appreciated as I dont fancy my chances getting through to HMRC at the moment!

Rozzi Rainbow

Hi Zara

Sorry, I don't know the exact answer to your question but from the HMRC website here:

http://www.hmrc.gov.uk/paye/intro/nics-holiday/eligibility.htm#4

"Businesses not considered to be new
In most cases, it should be very clear that your new business is genuinely new. However if your business has, for example, recently changed ownership or was formerly part of another established business, then you'll need to confirm that it doesn't fall into one of the excluded categories before going on to apply for the holiday."

And from this page:

http://www.hmrc.gov.uk/thelibrary/tax-paye/nics-holiday/not-new-business.htm

"Businesses that aren't considered to be new
The test of a new business is based on the activities of the business. For the purpose of the holiday, the test requires you to look at the activities of the new business and to consider whether all, or most of them, have previously been carried on by them in another business during the six months leading up to the start of this business. Also you need to decide if the new business consists of activities, or mostly of activities resulting from the transfer of most of the activities of another business. In considering those activities, you will need to consider whether there are similarities that may exist between the products or services, the customers, suppliers and the employees of any previous or ongoing business and the new business.

Your business will not be considered to be new and therefore won't qualify for the NICs holiday if any of the following apply:

at any time in the six months leading up to the start of this business, you carried on another business and the new business consists (or mostly consists) of activities that were undertaken in the other business
you begin to carry on a business as a result of a transfer of another business and the activities of the new business (or most of them) were previously carried on in the other business
you begin to carry on a business and before the business starts you enter into an arrangement to take on an existing business or part of an existing business at some point during the period of the NICs holiday
The meaning of “most of them” in this context means the greater part or the majority of the activities."

So my interpretation of the above is that if they have been closed for less than six months, they will not be entitled to the Holiday.

zara5034

Thanks for that

Yes I interpret that the same as you and I didn't think she would be entitled to it in the first place, plus, I'm sure it was closed for less than 6 months.

Unfortunately her previous accountant has mentioned it to her, so she now want to know more.

The whole thing seems like more work than it's worth!