Employment allowance

Have you claimed the employment allowance where you are eligible to do so? It is worth up to £3,000 per year per business, but many small businesses don’t realise that they can claim.

The allowance is available to most businesses and charities who have employees, but it is blocked for those who undertake public sector contracts, and for one-person companies. Payrolls set-up to pay personal care and support workers can claim the allowance, and should do so.

If you were not eligible to claim the employment allowance at the beginning of the tax year because you were the sole director of their company with no other employees, you can claim later when you take on an employee. The full £3,000 for the year is available to cover employer’s class 1 NIC, even if the claim was made part way through the tax year.

Where a claim for employment allowance was missed for an earlier tax year, it can be claimed within four years of the end of the year. Claims for 2014/15 must be made by 5 April 2019 by submitting an EPS for that year.

Written by the Tax Advice Network