TT215: Don’t forget to claim your Employment Allowance

February 09, 2015
Employment Allowance

There is less than two months to go before the end of the tax year which means there are a number of forthcoming end of year PAYE processes to be completed including submission of the final Full Payment Submission (FPS). As part of the end of year review you should ensure that you have claimed the £2,000 “Employment Allowance” for the tax year.

The Employment Allowance allows employers to reduce the amount of employer’s Class 1 National Insurance contributions (NICs) payable by up to £2,000 for each tax year beginning with 2014-15. Most employers can claim the relief although there are some notable exceptions which include businesses doing more than half their work in the public sector or, service companies with only deemed payments of employment income under ‘IR35 rules’.

There are some complex rules for employers with multiple payrolls or groups of companies.

The Employment Allowance can be claimed at any time during the tax year via your payroll software.

Even if you have ‘missed the boat’, all is not lost. You can make a claim up to 4 years after the end of the tax year to which the Employment Allowance applies. For example, a valid claim for the Employment Allowance for the tax year 2014-15 must be made by the 5 April 2019, although clearly it makes sense to make the claim as soon as possible

If you require any further information please contact your Barnes Roffe partner.

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