FIFTEEN hundred businesses in this parliamentary constituency of New Forest West have now claimed the Employment Allowance, which the Chancellor of the Exchequer George Osborne introduced in April this year.

The allowance encourages employment by offering businesses and charities throughout the UK a reduction of up to £2,000 every year in their Employer Class 1 National Insurance Bill. This is a key part of the Government’s economic plan and is designed to support business and growth.

New figures published last week show that, throughout the UK, 856,000 employers have already claimed the Employment Allowance only six months after its introduction – despite having up to four years to make the claim. The Government estimates that, as a result of the allowance, up to 500,000 small businesses and charities will now pay no employer National Insurance Contributions (NICs) at all this financial year.

As a result of the allowance, a business employing one person on a salary of £22,400, or four adults full-time on the national minimum wage, will pay no employer NICs at all. A business employing three people on the average private sector wage will see their typical NI bill cut by 25 per cent.

What I do find extraordinary, however, is that 32 per cent of the 1.25m firms estimated to be eligible have, so far, not claimed the allowance – why are they looking a gift horse in the mouth?

The figures for claiming the allowance breakdown by size: 68 per cent of firms with one to nine employees; 73 per cent of firms with 10 to 49 employees; 56 per cent of firms with 50 to 249 employees; and 35 per cent of firms with more than 250 employees.

Clearly, £2,000 is of less significance to very large businesses, but they still ought to claim it. After all, even if it does not mean much to them, I am sure that there are lots of local charities to whom they could give it who would be very glad to have it.

What is harder to explain is the fact that fewer of the smallest firms – those with fewer than ten employees, and to whom it would make most difference – have claimed it, than in the 10-49 employee group.

I expect this is down to those smaller businesses just not knowing about it despite the publicity and the Chancellor having written to them all. This is a shame because £2,000 can make quite a difference to very small businesses and might make the difference between it being economically viable to take on an additional employee.

We can all help by asking small businesses we encounter every day, if they know about it and if they are claiming it. If in doubt they can check their eligibility and see more practical details online at gov.uk/employment-allowance.

One of the most encouraging features of the last four-and-a-half years has been the growth in employment: with 1.8 million new jobs since May 2010, we now have the highest level of employment ever in our history, with 31 million people in work, and we have seen the sharpest falls in unemployment ever.

There are now fewer workless households than ever before.

For every public sector job we have had to lose in order to deal with our deficit, the private sector has created three new jobs.

This didn’t happen by accident: we have stuck to a clear economic plan, and it is vital that we continue to stick to it. The country is going in the right direction and we need to keep it that way.

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