• Employment Allowance 31 March 2014 | View comments

  • EMPLOYMENT ALLOWANCE

    What is Employment Allowance?

    Employers can have a reduction in their Employer’s National Insurance Contributions (NICs) of up to £ 2,000 per tax year.

    When is the Employment Allowance effective?

    The Employment Allowance is effective from 6 April 2014 i.e in the tax year 2014/2015.

    How do you claim for the Employment Allowance?

    The Employer has to notify HMRC via their RTI  (Real Time Information) payroll system.

    Against how many payroll schemes can the Employment Allowance be claimed?

    The Employment Allowance is for one payroll scheme only where there are connected parties such as same directors, same group of people such as husband and wife.

    Can the Employment Allowance be used against Class 1A and Class 1B NICs?

    No, the Employment Allowance is only against Class 1 Employer’s NICS.

    Who is excluded from the Employment Allowance?

    The Employment Allowance does not apply to:

    - people who employ someone for personal, household or domestic work such as a nanny, au pair, chauffeur, gardener or care support worker.

     

    -businesses who carry out functions wholly or mainly of a public nature such as NHS, GP and prison services.

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