Are you claiming the NIC employment allowance?

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Are you claiming the NIC employment allowance?

For some time now, employers have been able to reduce their Class 1 NI contributions that relate to their employment of staff. The relevant relief, the employment allowance, is worth up to £3,000 per year and is available to most businesses and charities to be offset against their employer’s Class 1 NIC bill.

Claiming the allowance is fairly straight forward, all that is required is a tick in the relevant box in your payroll software.

Eligible employers that have not yet done so can still claim for the current 2017-18 tax year (as well as make a back dated claim for one further tax year).

There are restrictions that limit claims for this relief. For example, the relief is no longer available for limited companies with a single director and no other employees.

There are a number of other excluded categories, these include:

  • Persons employed for personal, household or domestic work, such as a nanny or au pair (unless they are a care or support worker);
  • A public body or business doing more than half of its work in the public sector;
  • A service company working under ‘IR35 rules’ whose only income is the earnings of the intermediary.

Please note, the relief only applies to your employer’s Class 1 NI contributions, you cannot set-off the £3,000 allowance against employees’ Class 1 NIC deductions.

Please call if you need help adjusting your payroll software to claim this relief, or to make a back dated claim.

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