Proposals announced in Budget 2013 aimed at encouraging businesses to recruit more, will be available to large multi-national corporations with UK offices - but not families employing a house nanny.

The Employment Allowance, introduced by the Chancellor yesterday, will provide up to £2,000 in National Insurance Contributions (NICs) to all businesses, charities and amateur sports clubs employing UK staff who must opt-in to benefit from the scheme.

The allowance will remove the burden of paying NICs altogether for 450,000 small businesses and the government hopes that it will free up employers to take on more staff.

An HMRC spokesperson said: 'The Employment Allowance will be aimed at all businesses and charities. They have to be a business, so a family employing a nanny will be exempt from it.'

The measure will come into effect from April 2014.