01872 271947 | This email address is being protected from spambots. You need JavaScript enabled to view it.

Register for our Newsletter

Claiming the employment allowance

Source: HM Revenue & Customs | | 28/08/2018

The employment allowance of £3,000 per year, is available to most businesses and charities to be offset against their employers Class 1 NIC bill. The allowance can be claimed as part of the normal payroll process.

An employer can claim less than the maximum if this will cover their total Class 1 NIC bill. Eligible employers that have not yet done so can still claim for the current tax year (as well as make a backdated claim for one further tax year).

The eligibility to claim the employment allowance was removed for limited companies with a single director and no other employees, from April 2016. As the allowance was introduced as an inventive to take on staff, it was felt unfair that companies with a single director and no employees should benefit from the allowance.

There are a number of other excluded categories where employers cannot claim the employment allowance.

These include:

  • Persons employed for personal, household or domestic work, such as a nanny or au pair (unless they are a care or support worker);
  • A public body or business doing more than half your work in the public sector;
  • A service company working under ‘IR35 rules’ and your only income is the earnings of the intermediary.


Latest News

2020 May bank holiday will be moved to mark 75th anniversary of VE Day
19/06/2019 - More...
The government has announced that the...

Gifts with strings attached
18/06/2019 - More...
The majority of gifts made during a...

The tax consequences of social events
18/06/2019 - More...
The cost of a staff party or other...