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Employment Allowance Letters

HMRC have announced that from April 2022 the amount of Employment Allowance that eligible employers will be able to claim has been increased to up to £5000.00

This has been communicated to many employers in the form of a letter or email and has also been on the HMRC website.

There are several conditions that you 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 ER 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 as a reduction in the amount due to be paid over to HMRC.

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 Employers National Insurance that was due.

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

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