Employment Allowance

Tax Question

I am currently claiming the Employment Allowance which significantly assists in cash flow for my business. I have heard that the rules are changing making it more difficult or impossible to attain relief is that correct?

Tax Answer

With effect from April 2020 the criteria for making a claim to Employment Allowance are changing and certain employers will no longer be able to take advantage of the £3000 currently available.

The businesses most likely to be affect are those where the secondary NIC payable is in excess of £100,000, they will no longer qualify. In addition, the Employment Allowance will be reclassified as State Aid so for those employers who already make a claim for such payments the limit or threshold may be reached much more quickly.

These changes will require employers to make a claim annually and not rely on simply carrying forward a previous entitlement. The information requested by HMRC will be on the Employer Payment Summary (EPS) as part of the requirements under payroll for Real Time Information (RTI).

Non provision of the information will simply deny the possibility of a claim so timely and accurate details are essential to ensure a valid and immediate Employment Allowance is granted

Elaine Wood – Vantage Tax Advisor

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