Eligible employers have been able to reduce their employer Class 1 NICs by up to £3,000 each tax year.
The Employment Allowance can be claimed by a business or charity (including Community Amateur Sports Clubs) that pays employer Class 1 NICs on their employees’ or directors’ earnings.
However there are some circumstances which may limit the availability of the allowance:
- if a company belongs to a group of companies or a charity is part of a charities structure, only one company or charity can claim the allowance
- the £3,000 Employment Allowance can only be claimed against one PAYE scheme, even if the business has more than one PAYE scheme.
Not all businesses can claim the Employment Allowance and the government guidance gives the following details of excluded employers.
You cannot claim the Employment Allowance, for example if you:
- employ someone for personal, household or domestic work, such as a nanny, au pair, chauffeur, gardener or care support worker
- already claim the allowance through a connected company or charity
- are a public authority, this includes; local, district, town and parish councils
- carry out functions either wholly or mainly of a public nature (unless you have charitable status), for example:
- NHS services
- General Practitioner services
- the managing of housing stock owned by or for a local council
- providing a meals on wheels service for a local council
- refuse collection for a local council
- prison services
- collecting debt for a government department
If you would like any guidance on claiming the allowance please do get in touch. If we deal with your payroll we will ensure this matter is dealt with on your behalf.