The FSB claims its research shows that over a two-year period, if the scheme were to be opened up to all micro-firms across the UK, it would add 45,000 jobs and £1.3 billion to the UK economy. However, only 27,000 jobs would be created if this scheme were extended to all businesses within the current scheme's limited area, adding almost £700 million.
The NIC scheme, which Government gave £800 million to fund, gives new businesses outside the south east, east of England and London a break in paying National Insurance for up to 10 new staff they take on. Only 15,000 firms of the projected 200,000 have used the scheme, in place since June 2010, the FSB said.
The FSB research estimates that the scheme could be implemented UK-wide for around £500 million less than the existing budget - when the wider economic impact of getting people into jobs, paying income tax and having disposable income is taken into account.
John Walker, national chairman, FSB, said: "The NIC holiday is the Government's flagship policy to boost employment, but it hasn't anywhere reached the levels that were predicted.
"Extending the scheme will involve a financial outlay by Government, but having more people in work will increase tax revenues in the long run as more people are paying tax than receiving help from the state through JobSeeker's Allowance."
He added: "Getting people into full-time work will mean they have more money to spend, increasing revenue from VAT."
The research is based on a survey of 2,774 FSB members, carried out online by market research company Research by Design, between 12 to 26 June 2012.
