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Employment allowance points to watch

April is the time of the year when the payroll team claim the Employment Allowance for clients.


Points to watch include

 

1.     The allowance has remained at £5000 for 2024/25 year-end

2.     If your business is eligible for the allowance it should be claimed through the monthly RTI submissions

3.     Only businesses with Class 1 Employer’s National Insurance, in the prior tax year of less than £100000, can make a claim


4.     Group companies must look at their total employer’s national insurance (i.e. all group companies) to determine if they have exceeded £100000


5.     Companies with only one person payrolls and that person is the director cannot make a claim


6.     If the business has multiple payrolls then the allowance may only be claimed on one of those payrolls


7.     The Employment Allowance is designated a state aid. The amount a company can receive in state aid is set out in legislation. Whilst not affecting most small companies if the state aid limit for the company’s sector is exceeded by the claimant then claiming the employment allowance might not be possible. Check details here

 

The employment allowance will be covered on our forthcoming Employment Taxes webinar.

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