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
 
Ben Kilby
4th May 2021 Sage 50 VAT ‘T’ codes

With the changes to the reverse charge on VAT returns due to the UK leaving the EU from 1 January 2021, I thought I would share a reminder of the default tax codes within Sage from v27.1 onwards:   T0 – Zero rated transactions T1 – Standard rated transactions – Currently 20% T2 – Exempt…

Read More »

Angelica Hunt
19th April 2021 HMRC – Tax refund delays

A number of our clients are experiencing long delays in receiving tax refunds from HMRC.   HMRC attribute these to the need for them to perform security checks in order to combat fraudulent claims.  In some cases, HMRC need more information in order to verify genuine claims.   They may issue a verification letter, either…

Read More »

Ian Piper
15th April 2021 2021 SME Growth: Revenge Spending?

As we pass the Covid-19’s first anniversary of its impact on our area’s economy, accounts of local SME’s are now starting to show part of the damage they have experienced through the lock-downs and associated restrictive measures. Thankfully, through Government financial help and the nimble footwork of businesses adapting to survive, the overall effect upon…

Read More »

Jaimie King
15th April 2021 Life after CBILS: The Recovery Loan Scheme

The government-backed Coronavirus Business Interruption Loan Scheme closed on 31st March to new applicants. Thankfully, the government has put in place further support for businesses, to follow this.   The Recovery Loan Scheme – Government backed loans, 3 months – up to 6 years depending on the product – Up to £10m, no cap on…

Read More »

Vanessa Pearson
26th March 2021 6 April: A Guide to Off-Payroll Working Tax Rules

The proposed new rules apply regarding who determines IR35 status for freelancers hired by medium and large companies are imminent. Our Brief Guide will help find out how this affects you and what you can do: A Brief Guide to Off-Payroll Working Blog entry by: Vanessa Pearson

Read More »

Ben Kilby
25th March 2021 I hear a rumour…

I hear a rumour that Lloyds Agricultural banking team based in Edinburgh has been disbanded and merged within other teams around the country. Although some within the new regional teams may have some knowledge of agriculture it has been suggested that customers felt that this was not important. It seems that the agricultural specialism within…

Read More »