The Italian government are to cancel a tax provision which has been criticised for penalising businesses who employ large numbers of workers.
Thanks to the Federation of International Employers for their report of the announcement by the Italian Minister of Economy, Pier Carlo Padoan. The Minister has publicly confirmed that the Italian government will cancel, as of 1 January 2015, the part of IRAP (the regional tax on production) which is calculated on the labour costs of permanent employment. It is estimated that this will reduce the tax burden on businesses employing a large number of workers by 30%.
National Insurance
Employment Allowance
Employment Allowance should be extended to domestic employers
26 February 2014
The Chartered Institute of Payroll Professionals recently conducted a survey in respect of National Minimum Wage. During the promotion CIPP members asked the policy team why the new Employment Allowance was not open to domestic employers. Some respondents acknowledged whilst increasing the NMW wage would be good for the economy and potentially encourage people off benefits and into work, the financial impact on the SME could conversely lead to a reduction in staff due to the profit margins shrinking too low. The change from April 2014 is the introduction of an Employment Allowance providing up to £2,000 employer National Insurance relief, though this allowance doesn’t extend to the domestic sector. In response to the NMW survey it was asked, if the NMW rises in October along with other employment costs will parents continue to employ nannies enabling them to work, or will it become more cost effective for one parent to stay at home? “Legislation is meant to be actively encouraging all back to work, so the CIPP is surprised to see a Policy that does not actively promote this. The government also says it wants a fair tax system, is excluding this sector who contributes with employer’s National Insurance fair? The CIPP therefore urges the government to also consider extending the Employment Allowance to all employers (except the public sector) which the CIPP believes will help an already struggling industry.” In support of this extension one of the CIPP members, responsible for assisting parents by providing payroll services to them, Helen Harvey, Payroll Services Director for NannyTax said: “We are extremely disappointed that the government has decided to exclude domestic employers from applying for the new employment allowance. With the lack of affordable childcare, and pressures on family income, many parents have to work whilst bringing up their children, and employing a nanny is the only option available to them, especially if they have to work shift patterns such as nurses and police. We are also concerned by the timing of this, as it coincides with the removal of the Percentage Threshold Scheme, which these small employers relied upon when their employees were ill, and the rising cost of implementing automatic enrolment which is just around the corner.” Karen Thomson, Associate Director of Policy, Research & Strategic Visibility said:
Also in support of this extension is Alison Hull, FCIPP, Director, NannyMatters and The Pay Team who said:
CIPP Policy News Journal
08/04/2015, Page 216 of 521
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