Changes to Employment Allowance

Changes to Employment Allowance

From April 2020 employers whose employers National Insurance bill was £100,000 or more in the previous tax year will no longer be eligible for Employment Allowance.

If you have more than one payroll the employers National Insurance will be added together and if the total over the linked businesses is over £100,000 you will not be eligible to claim.

HMRC may send you a letter to advise you of the changes. We will be assessing eligibility for our payroll clients that currently claim the employment allowance, therefore if we process your payroll you do not need to take any action.

If you are aware of a linked PAYE scheme to your payroll, you must notify us, so we can complete the correct checks.

The annual £4000 allowance will still be available to smaller employers whose employers National Insurance bill was less than £100,000 in the previous tax year.

You are still only able to claim the Employment Allowance on one PAYE scheme, so if you have more than one scheme you will need to inform us which scheme you would like us to claim the allowance on.

The allowance is claimed by reducing the employer National Insurance paid over to HMRC, therefore, many small employers will not be able to claim the full £4,000.

For more information on the employment allowance please take a look at the HMRC guidelines :  https://www.gov.uk/guidance/changes-to-employment-allowance