When you can’t claim employment allowance

Spring Statement 2018
December 7, 2017
Benefits of letting furnished holiday property
December 20, 2017

When you can’t claim employment allowance

The employment allowance of £3,000 per year is available to most businesses and charities and can be used to be offset against their employers Class 1 NIC bill. The allowance can be claimed as part of the normal payroll process.

An employer can claim less than the maximum if this covers their total Class 1 NIC bill. Eligible employers that have not yet done so can still claim for the current 2017-18 tax year (as well as make a backdated claim for one further tax year).

The eligibility to claim the employment allowance was removed for limited companies with a single director (paid above the Secondary Threshold) and no other employees in April 2016.

Planning note

There are a number of other excluded categories where employers cannot claim the employment allowance.

This includes:

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

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