Who can or cannot claim the Employment Allowance

claim the Employment Allowance

Who can or cannot claim the Employment Allowance

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.

For more information on ‘claim the Employment Allowance’, Book a Free Consultation

See also  Tax implications for construction industry

Need Accountancy Support?

For information on bespoke training, or if you have any other questions for Makesworth Accountant, please fill in your details below

Accountancy Support

Your Name(Required)

Proud to be featured in

Happy with our services? Please leave us a Google Review. Click here