Under the new scheme, unveiled during this year's Budget, businesses with under 50 employees will be able to benefit by up to £2,000 off their employer National Insurance Contributions (NICs) Bill from April 2014 with an estimated 46,000 in the sector thought to be eligible.
A business that employs one person on £22,400 will pay no NICs while one employing five adults full-time on the National Minimum Wage will see their employer NICs bill reduced by more than 80 per cent.
Businesses will just have to confirm their eligibility for the allowance through their regular payroll processes and up to £2,000 will be deducted from their employer NICs liability over the course of the year.
Exchequer Secretary to the Treasury David Gauke said: “Small businesses are the lifeblood of our economy and we want to do what we can to support them. The Employment Allowance will reduce the cost of taking on new staff, supporting 108,000 businesses in the catering, accommodation and food industries, and hundreds of thousands more across the UK with an ambition to grow, by reducing the cost of hiring their first employee or growing their workforce.”