FSB urges extension of NI holiday

The Federation of Small Businesses (FSB) has called for an extension of the National Insurance (NI) contributions holiday given to smaller employees.

Under the current scheme, new businesses outside of the South East and East of England and London receive a break in paying NI for up to ten new staff.

A total of £800 million in government funding has already been allocated to the scheme. But the FSB has used the Conservative Party Conference in Birmingham to lobby ministers to extend the scheme.

It has so far had a limited impact, with just 15,000 of the projected 200,000 taking advantage of the scheme since its initial foundation in the summer of 2010. Due to the low take-up, the FSB is calling for the NI holiday to be extended until the end of parliament, instead of being wound up next September as planned.

Steve Warwick, London regional chairman, commented: “The contributions holiday is the government's flagship policy to boost employment but it hasn't anywhere reached the levels that were predicted.”

The government has suggested that small businesses will save the UK economy, but so far businesses have continued to struggle to overcome the current economic climate.