Who can or cannot claim the Employment Allowance

Source: HM Revenue & Customs | | 05/12/2018

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 in 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 their work in the public sector;
  • a service company working under ‘IR35 rules’ and your only income is the earnings of the intermediary.
 

Latest news

Search archive


Newsletter

With our newsletter, you automatically receive our latest news per e-mail and get access to the archive including advanced search options!

» Sign up for the newsletter
» Login