One-third of small businesses would hire more staff if national insurance contributions were reduced, research from the Federation of Small Businesses (FSB) shows.

The FSB’s Voice of Small Business survey, with more than 1,700 respondents, shows that insufficient work and uncertainty over contracts (37 per cent), the state of the economy (33 per cent), cash flow (31 per cent) and access to finance as well as the cost of credit (16 per cent) are preventing SMEs from employing new staff.

Significantly, 31 per cent of respondents say that reducing national insurance contribution payments for the first six months of employment would encourage them to take on more staff, and 11 per cent say that extending the national insurance contribution holiday scheme would be an incentive.

While, last year, the government introduced a national insurance contribution holiday for startups that take on up to ten employees, the FSB says this doesn’t go far enough. Instead, the FSB would like the scheme to be extended to existing firms with up to four members of staff that take on up to three new employees.

“Small businesses want to employ, but have told us that they need incentives to do so,” says John Walker, chairman of the FSB. 

“The government must extend the national insurance contributions holiday to existing businesses if small firms are to take on new staff and so help tackle high unemployment.”

Would you hire more staff if national insurance contributions were reduced? Leave your comments below.

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