Employment Allowance 2017-2018

You could get up to £3,000 a year off your National Insurance bill if you’re an employer.

Since 6 April 2014 eligible employers have been able to claim the ‘Employment Allowance’ to reduce their employer Class 1 National Insurance contributions (Employers NICs). For the tax years 2014-15 and 2015-16 the allowance was £2000, for 2016-17 it was increased to £3000 and the current year 2017-18, the allowance is £3000.

Eligibility

You can claim Employment Allowance if you’re a business or charity (including community amateur sports clubs) paying employers’ Class 1 National Insurance.

You can also claim if you employ a care or support worker.

If you have more than one employer PAYE reference, you can only claim Employment Allowance against one of them.

You can only claim against Class 1 National Insurance you’ve paid, up to a maximum of £3,000 each tax year. You can still claim the allowance if you pay less than £3,000 a year but the total amount of Employment Allowance claimed must not exceed your Employer’s National Insurance Liability..

How to claim

To claim Employment Allowance you must advise HMRC that you will be offsetting your Employers NI liability against the Employment Allowance by sending an EPS file and selecting ‘Yes’ in the ‘Employment Allowance indicator’ field. Then simply reduce the payment you send to HMRC each month by the amount of Employer’s NI liability due in the period until you have claimed a maximum cumulative amount of £3000.

For clients using our Payroll & Pension service, we will automatically do this for you and detail the value of Employment Allowance claimed on your statement each time we process your payroll.