From 6 April 2014 most employers will be able to claim a £2,000 annual allowance to set against employer’s class 1 NICs due on employees’ wages. You can claim the Employment Allowance if you are a business or charity (including Community Amateur Sports Clubs) that pays employer Class 1 NICs on your employees’ or directors’ earnings. If your company belongs to a group of companies or your charity is part of a charities structure, only one company or charity can claim the allowance. It is up to you to decide which company or charity will claim the allowance. You can find guidance here on businesses that are sadly not eligible.
The allowance is simple to claim – just tick the box on the first Employer Payment Summary (EPS) submitted for 2014/15. Your payroll software should accommodate this, or alternatively, if you outsource payroll to ourselves we will of course undertake the necessary on your behalf.
Once the claim is made it stays in place for all future tax years, until the PAYE scheme is closed (or the Government withdraws the allowance!) Only employers can claim the employment allowance, and it cannot be set against class 2 or 4 NICs paid by the self-employed. If you do need further advice, please contact the office on 02920 713 800.