If you are an employer and paying National Insurance for an employee, you could get up to £3,000 off your National Insurance bill by claiming Employment Allowance.
The allowance effectively reduces your employers Class 1 National Insurance (NI) each time you run your payroll, either until the £3k has been used up or it’s the end of the tax year.
Who Can Claim
If you are a business or charity (which includes community amateur sports clubs), and paying Class 1 NI, then you are eligible to claim. Also, if you employ a carer or support worker, it’s likely you’ll also be able to claim this allowance.
Who Can’t Claim
There are 4 main categories of businesses that can’t claim the allowance:
- If you are the director of the company and the only employee paid above the secondary threshold (just over £8k per year)
- You employ someone for personal, household or domestic work – such as a nanny or a gardener, unless they are a care or support worker
- You’re a public body doing more than half your work in the public sector
- You’re a service company working under the IR35 rules
How to Claim
Claiming is easy through your payroll software, or you can access the claim process through the Basic PAYE tools from the HMRC.
For more information
Our Payroll Section is able to help with all of your questions regarding any of the complexities involved in paying staff. If you need any help at all, please contact us here.