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SMEs look set to hire

Small businesses in the UK are looking to take on more staff in the final months of 2013 compared with the previous quarter, according to a survey by the Federation of Small Businesses (FSB).

The FSB's Voice of Small Business Index found that 15 per cent of businesses increased their staff numbers in the third quarter of 2013 - the highest figure since the index began in 2010.

The increase in business optimism could be linked to the recent growth in UK GDP, which is estimated to have grown by 0.7 per cent in the three months to June according to preliminary data from the Office for National Statistics.

The FSB said that the Government's National Insurance Contributions (NICs) holiday scheme would also encourage more firms to take on new staff.
Under the employer NICs holiday scheme in effect from April 2014, eligible new businesses can benefit from a £5,000 reduction on the employer NICs normally due for each of the first ten employees they take on.

According to FSB research, firms will use the allowance to:

  • boost staff wages (29 per cent)
  • take on additional staff (28 per cent)
  • invest in new equipment or resources (24 per cent).

National chairman for the FSB, John Allan, said: "Compared with a year ago, small businesses are employing more staff and are looking to expand in the near future. This points to growing confidence from the UK's small businesses."

"Our findings show that the Employment Allowance due to kick in next spring will have the desired effect. Through the measure, small firms are looking forward to taking on more staff, expanding their businesses and rewarding existing employees for their efforts."

"That said, the most recent unemployment figures show that long term unemployment, particularly among young people remains a concern."