Employment Allowance 2024

The amount of Employment Allowance that eligible employers will be able to claim will remain at up to £5000.00 in the 2024/245 tax year. HMRC are likely to communicate this to all employers in the form of a letter or email.

There are several conditions that employers must comply with to be eligible, and for small employers they include:

• If you have multiple PAYE schemes, only one scheme can claim.
• The payroll must pay at least one employee (who is not a director) above the secondary National Insurance threshold.
• The employer must be due to pay Employers National Insurance (as Employment Allowance is claimed by offsetting the Employer National Insurance due).

We will be assessing eligibility for our payroll clients and will automatically claim the employment allowance by reducing your Employer National insurance liability if you qualify.

Please note that employment allowance can only be claimed against the Employer’s National insurance due in the tax year and therefore you will not receive the £5000.00 as a payment, but instead as a reduction in the amount due to be paid over to HMRC for employer National insurance.

If your Employer National Insurance contributions are below £5000.00 in the tax year, you will only be able to claim up to the total amount of Employer’s National Insurance that was due.

If we process your payroll, you do not need to take any action.

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