George Osborne revealed the reduction, designed to reduce levels of youth unemployment, alongside other announcements that will affect employers – including an earlier than expected increase in the state pension age and more accessible funding for apprenticeships available directly from HM Revenue & Customs (HMRC).
The removal of employers’ national insurance (NI) contributions for under-21s in April 2015 will follow the introduction of the £2,000 “employment allowance” that comes into force next April. Higher-rate tax payers who are under 21, earning £813 per week or more, will still attract employer NI contributions.
“Employer NI contributions will be removed altogether on a million and a half jobs for young people. We’re not going to leave young people behind as the economy grows,” said Osborne. “We are going to have a responsible recovery for all.”