New employment allowance set to dramatically boost job creation

• One in five SMEs have been encouraged to expand by the Government’s decision to introduce an Employment Allowance towards employer NI contributions
• A further one in three of SMEs are considering recruiting due to the reduced cost of employment
• Four in ten SMEs have the necessary insurance in place for expansion within their business
   

According to new research1 from Direct Line for Business (“DL4B”), one in five (20 per cent) Small to Medium Sized Enterprises (SMEs) in the UK has been encouraged to expand following the Government’s decision to introduce an Employment Allowance of £2,000 a year towards employer National Insurance (NI) contributions2.

In addition to those small businesses that are looking to expand, a further 33 per cent of firms are considering recruiting due to the reduced cost of employment.

However, despite these encouraging plans small companies are not prioritising business protection, with only 40 per cent believing they have necessary insurance cover in place for expansion. Business owners prioritise the importance of setting targets (68 per cent) and the need for a comprehensive business and marketing plans (66 per cent). Unfortunately, many seem less prepared when it comes to ensuring their business is protected if things go wrong, or their cover is aligned to the expansion of their business.

Jazz Gakhal, Head of Direct Line for Business commented: “It is encouraging to see that so many UK businesses are looking to expand. The Government’s decision to reduce the financial burden for small companies is a welcome boost for owners and managers across the country. Given SMEs account for over 99 per cent3 of all private sector businesses in the UK, the health of this sector is vitally important.”

“However, it’s concerning that a majority of these businesses aren’t adequately protected for liability or loss, which could spell disaster for them should the worst happen. Taking on staff is a big responsibility and as a business expands it’s easy to neglect some business processes as SME owner-managers are pulled in a myriad of different directions. Ensuring that businesses maintain adequate insurance cover is as vital as ensuring that the marketing plan is up to scratch. Protecting yourself against fire, theft, loss of earnings and compensation claims could mean the difference between healthy business growth and a business having to fold.”

For more information on Direct for Businesses insurance cover, please visit the website: http://www.directlineforbusiness.co.uk/

-Ends-

Notes to editors

1. Consumer intelligence interviewed 1895 people on behalf of Direct Line for Business between 2nd – 4th April 2013.
2. From April 2014 all businesses and charities will be eligible for the new allowance, which will reduce their National Insurance contributions (NICs) bill.
3. http://www.fsb.org.uk/stats

For further information please contact:
Citigate Dewe Rogerson
Ewan Robertson/Jamie Brownlee
020 7282 2981/2858

Direct Line for Business

Launched in 2007 Direct Line for Business provides a range of insurance products for the small business sector direct by phone or on-line.

Direct Line for Business insurance policies are underwritten by U K Insurance Limited, Registered office: The Wharf, Neville Street, Leeds LS1 4AZ. Registered in England and Wales no 1179980. U K Insurance Limited are authorised and regulated by the Financial Services Authority.

Direct Line for Business and U K Insurance limited are both part of Direct Line Insurance Group plc.

Customers can find out more about Direct Line for Business products or get a quote by calling 0845 301 4827 or visiting www.directlineforbusiness.co.uk/