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Demand for NICs holiday to be extended

Established concerns should be included, say small firms

Small businesses have called on the government to extend the new National Insurance (NI) contributions holiday to established firms, saying such a move would create an environment for job creation and to help stem high unemployment.

The holiday – applicable to start-ups that take on a maximum of ten members of staff – does not go far enough, according to the Federation of Small Businesses (FSB), which has published the results of research that show the proportion of businesses that looked to take on new employees in 2010 fell from 12.2% in quarter three to 8.7% in quarter four.

Looking to 2011, 12.4% of small concerns expect to decrease their staffing levels in the current quarter. Official figures released this week by the Office of National Statistics showed that joblessness increased by 44,000 to almost 2.5 million in the final quarter of last year.

The new FSB document, National Insurance Holiday for New Jobs in Small Businesses, claims 44% of small firms would take on more staff if the NIC break was to be extended to established businesses that have no more than four members of staff and take on up to three more, in an attempt to stem the trend of rising unemployment.

The FSB’s national chairman, John Walker, said, ‘Unemployment is worryingly high and with inflation above target, small firms cannot rely solely on the consumer for growth.

‘As we have heard time and again, the government is looking to the private sector to lead the recovery, but without the right measures in place, small firms are left without the tools they need for the job at hand,' he added.

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