The Employment Allowance (EA) is £3,000 for the tax year 2019/20. The allowance can be set off against your Employer’s NI bill.
The amount of allowance you can claim is capped at the amount of your employers NI bill in a month (if under £3,000) and any unused allowance will be carried forward to use in the following month.
From April 2020:
- You won’t automatically qualify for the EA. You must claim it each tax year. This will involve submitting a declaration confirming that you have checked and are satisfied that you meet all the conditions for eligibility.
- the £3,000 employment allowance will only be available to businesses that had an employer’s NIC liability less than £100,000 in the previous year.
- Where the employers are connected (i.e. you share resources such as premises or staff) the £100,000 threshold will apply to their aggregated liability.
- the EA will be considered state aid and will count towards the maximum aid you can receive in a rolling three year period. You must have room to accommodate all of the £3,000 (not part of) in your state aid entitlement.
Companies with the Director as the only employee
Where the director is the only employee who is paid earnings above the secondary threshold, the company will not be eligible to claim the Employment Allowance.
If you need help or advice on how to claim, please give us a call on 01908 227055.
Last updated: 17 July 2019