Changes to Employment Allowance

8th April 2020

Employment Allowance can be claimed to reduce the amount of Employer National Insurance payable. The 2020/21 tax year has introduced the following changes to Employment Allowance:

  • The allowance has been increased from £3,000 per year to £4,000 per year
  • You can only claim the Employment Allowance if your total Secondary Class 1 National Insurance liability was below £100,000 in the tax year before the year you are claiming (e.g. 2019/20 tax year liability <£100,000)
  • For connected companies you should add together the total employers Secondary Class 1 NIC liabilities for all companies in the group, and if the total is below £100,000 you must decide which company will claim the allowance
  • Employment Allowance is now considered a type of De Minimis State Aid. You can only receive the £4,000 Employment Allowance if you have room under your industry ‘ceiling’ for further De Minimis State Aid. The ‘ceilings’ are as follows:

 

Business sector De minimis state aid threshold over 3 years
Primary production of agriculture products €20,000
Fisheries and aquaculture sector €30,000
Road freight transport sector €100,000
Other, industrial (everyone else) €200,000

 

–          You should have been told in writing if you have received De Minimis State Aid

 

For further guidance please click on the link below or get in touch with your usual W&P contact:

 

https://www.gov.uk/guidance/changes-to-employment-allowance

 



 
Other items in Blogs
 
Steven Denton
27th October 2020 Updated Job Support Scheme (JSS)

The new Job Support Scheme (JSS) replaces the Furlough scheme from November 1st, 2020. Under JSS claims can only be made in arrears and the first claims can only be made after December 8th, 2020. This means that any employers trying to claim for weekly payrolls may have to wait 5 weeks before they receive…

Read More »

Jeannette Hume
20th October 2020 Indexation Relief: Bank it

The Office of Tax Simplification (OTS) has been in consultation with individuals, businesses as well as professional advisers – including accountancy bodies – to review the capital gains tax system and see whether there is any scope to simplify the current tax system. The consultation process closes on 9th November 2020.   Speculation has been…

Read More »

Steven Denton
15th October 2020 Job Retention Bonus (JRS)

HMRC have announced more details on the Job Retention Bonus scheme they set forth in July. The JRS allows an employer to claim a one-off payment of £1000 per employee furloughed and claimed for through the CJRS and kept employed until at least 31st January. This money is to be paid to the employer and…

Read More »

Jaimie King
12th October 2020 AGM deadline extension for Charities

Due to Coronavirus, the Charity Commission had previously released guidance allowing Charities to postpone their scheduled AGMs to 30th September 2020, and allowing them to be held digitally.   This guidance has now been updated to allow postponement of AGMs to 30th December 2020.   The updated guidance can be viewed at – https://www.gov.uk/guidance/coronavirus-covid-19-guidance-for-the-charity-sector  

Read More »

Oliver Taylor
12th October 2020 What to do if your charity is facing financial difficulties?

In recent months many charities have found themselves in financial difficulties and an uncertainty of long-term survival, often caused by factors out of their control. Most notably the ongoing Covid-19 outbreak, which has had several knock-on effects such as a reduction in donation income or decreased operating capacity during the tightened lockdown rules. Other external…

Read More »

Ian Piper
9th October 2020 Pre-Packs: All change?

After many years of perceived abuse, the Government has announced that they are soon to introduce new laws to require stricter, independent, scrutiny where connected parties purchase a failed business out of liquidation. In announcing the move, the government said that while pre-pack administration sales are widely considered to be a valuable rescue tool, concerns…

Read More »