A government scheme to help new businesses save on national insurance will exclude companies in some of the UK’s most deprived areas.

A government scheme to help new businesses save on national insurance will exclude companies in some of the UK’s most deprived areas.

The scheme, which is due to start on 6 September, grants start-ups exemption from employer National Insurance contributions (NICs) in their first year, but does not apply to businesses in Greater London and the South East.

Roy Maugham, a partner at accountancy firm UHY Hacker Young, says: ‘By restricting the scheme to regions outside London and the South East, the Government is denying invaluable NICs savings to many of the businesses that would need them the most. London might be generally seen as more prosperous than other regions, but it’s also home to six out of ten of the most deprived areas in England.’


According to government figures, six out of the ten most deprived local authorities are located in London, with Hackney being the most deprived area in England.

While the national insurance exemption was designed to help create private sector jobs in areas most dependent on public sector employment, it excludes several areas in the South East with high concentrations of public sector workers including Portsmouth and Southampton, adds Maugham.

The national insurance holiday scheme was introduced in June’s Emergency Budget and applies to companies started up between 2 June 2010 and 5 September 2013.