New rules coming from 06 April 2020

This will affect only a few clients but is always worth looking at especially in relation to the basic allowance. Currently there is an allowance for employer NI allowance of £3,000 per year but from 6 April 2020, employers with a National Insurance contributions liability of £100,000 or more, or employers who are connected to other employers where their cumulative secondary Class 1 NICs liability is £100,000 or more, will no longer be able to claim the Employment Allowance.

It is being brought in to actually benefit smaller businesses so the limitation that companies will only be able to claim the Allowance moving forward if their NIC liability in the previous year was less than £100,000.

De minimis State Aid

The Employment Allowance moving forward will mean businesses will need to be aware if they are already claiming any other de minimis State aid(s). There is a three year cap on the total de minimis State Aid a business can claim – this cap is €200k over a three year rolling period.

How can I claim if my company is eligible?

A company could get up to £3,000 a year off their National Insurance bill if they are an employer.

The allowance will reduce your employers’ (secondary) Class 1 National Insurance each time you run your payroll until the £3,000 has been reached or the tax year ends (whichever is sooner).

You can only claim against Class 1 National Insurance you’ve paid, up to a maximum of £3,000 each tax year. You can still claim the allowance if you pay less than £3,000 a year.

Employment Allowance claims will need to be submitted each tax year. Claims will not automatically roll over from the previous tax year. Look out for more information in the coming months.