National Insurance holiday will benefit UK workforce, says report

FINANCE directors are backing a call for a year’s holiday from National Insurance contributions (NIC) when taking on the long-term unemployed.

According to research by business advisory firm Grant Thornton finance directors want the one year holiday when hiring employees who have been unemployed for more than 12 months.

The firm’s tax manifesto proposes that NIC payments should be scaled and paid later on in the employee’s working life when it would be more afforadable for individuals to pay.

The manifesto also proposes that companies which employ younger entrants to the workforce should be awarded a temporary NIC holiday in an attempt to deal with the desperate state of youth unemployment.

Jonathan Riley, managing partner at Grant Thornton’s Leeds office, said that one of the legacies of this recession was large scale unemployment.

“The direct costs, in the form of benefit payments and lost taxes, when coupled with the human costs to the unemployed and their families places this at the top of any political agenda,” he said.

“Our survey shows that both employers and employees require urgent assistance from the Government in getting people back to work.”

The research also found that nearly two thirds (73%) of finance directors wanted to see more training in the workforce paid for by the employer with the employee benefiting from tax incentives.

The manifesto proposes that the Government needs to promote the current and generous tax relief available for work related training.

This would allow full tax relief for any costs involved in equipping an individual with the skills they need to do their job and would be much broader in application than the very traditional job-based qualifications.

“Solutions need to be devised urgently before more businesses and individuals suffer further and the UK economy is permanently scarred.” continued Mr Riley.