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Employment Allowance: up to £2,000 off your Class 1 NICs

By James Russell: Employment Allowance: up to £2,000 off your Class 1 NICs

March 6, 2014

The Employment Allowance is available from 6 April 2014. If you are eligible you can reduce your employer Class 1 NICs by up to £2,000 each tax year.

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, 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 only claim the £2,000 Employment Allowance against one PAYE scheme – even if your business runs multiple schemes.

How to claim

You can use your own payroll software (see your software provider’s instructions), or HM Revenue and Customs’ (HMRC’s) Basic PAYE Tools to claim the Employment Allowance.

When you make your claim (using the software of your choice), you must reduce your employer Class 1 NICs payment by an amount of Employment Allowance equal to your employer Class 1 NICs due, but not more than £2,000 per year.

For more information click here

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