A small business pressure group says firms would take on more staff if National Insurance contributions were reduced.
The Federation of Small Businesses (FSB) says firms continue to be stifled by challenges that affected them during the recession, including late payments from other firms and a lack of finance from the banks which has forced many small firms to close
According to an FSB survey, ensuring invoices are paid within 20 days would encourage 17 per cent of small businesses to take on staff.
But nearly a third of respondents said that reducing NI payments for the first six months of employment would encourage them to take on more staff, and 11 per cent said extending the NI holiday scheme would be an incentive.
The government introduced a NI holiday for start-ups that take on up to 10 employees in 2010, but the FSB believes this does not go far enough.
Allan Banks, who chairs the FSB’s North Bucks Branch, said: “The government must extend the NI holiday to existing businesses if small firms are to take on new staff.”