From 6 April 2014 all business and charities will be eligible for a new £2,000 Employment Allowance to set off against their employers’ (secondary) national insurance contributions.
From 6 April 2014 all business and charities will be eligible for a new £2,000 Employment Allowance to set off against their employers’ (secondary) national insurance contributions.
The Employment Allowance is not available for:
• anyone who employs someone for personal, household or domestic affairs, for example, a nanny, au pair, chauffeur, gardener or care support worker;
• employers already claiming through a connected business or charity;
• public authorities;
• employers who carry out functions either wholly or mainly of a public nature, unless they have charitable status.
Service companies are not able to claim in respect of deemed payments of employment income.
HMRC have stated: “Your software, if it has the ability to submit an Employment Payment Summary (EPS) should require you to specify if you wish to claim the Employment Allowance and you should select the appropriate response. Alternatively, the Employment Allowance can be claimed through the 2014-15 version of the Basic PAYE Tools.
Employers exempt from filing online can claim the Employment Allowance by using the paper EPS from April 2014. Instructions for this have been included in the guidance provided to all exempt employers.
The Employment Allowance will be offset against payments of employer Class 1 NICs when they are due to be paid, until the full £2,000 Employment Allowance is used up or the tax year ends, whichever is soonest.”The Employment Allowance will be delivered through standard payroll software and HMRC’s real time information (RTI) system. It is intended that the system will be simple to administer with employers notifying their eligibility through normal PAYE processes.