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Chancellor to offer one-year employer NIC holiday

The emergency Budget is to give new businesses a one-year break from paying employers' national insurance contributions on the first ten staff they employ.

The measure could be worth up to £50,000 for fledgling firms.

However, the NIC holiday is to be limited to those employers outside of London and the south-east of England.

It is designed to boost those areas of the UK likely to be hardest hit by falls in public sector employment.

HM Revenue and Customs (HMRC) has estimated that the measure could affect as many as 400,000 new businesses. The scheme is set to run for a three-year period, with firms benefiting from the break for their first year in business.

The break will probably have a ceiling of £5,000 per employee and should be in place by the autumn.

By regionalising the tax breaks, the government will be hoping to take steps towards creating large-scale enterprise zones in an effort to stimulate private sector growth in specific geographical areas.