How do I deduct an NIC Holiday?

On 22 June 2010, the government announced a regional employer national insurance contributions holiday for new businesses.

If you are eligible for the scheme, you can deduct all or part of your employer's National Insurance liability from your payment to HMRC each month. Once you have followed the government's rules to work out how much employer's NI you can deduct, simply go to our HMRC Tax Payments page, click "Add a special item" and choose the option for "NIC holiday claimed". Once you click "Add", the system will automatically deduct the NIC holiday from your next payment to HMRC.

At the end of the year, your P35 will show that you have underpaid HMRC, and you will need to send in a separate 'Holiday return' to explain the difference.

You can read more about the NIC holiday scheme on this web page:
http://www.hmrc.gov.uk/paye/intro/nics-holiday/index.htm

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