HMRC have published guidance on an annual ‘employment allowance’ of £2,000 that every business, charity and CASC will be entitled to from April 2014 to reduce their liability for Class 1 secondary National Insurance Contributions (NICs) report Harris & Co accountants Northampton, the specialist Northampton small business accountant.
Legislation relating to this allowance is included in the National Insurance Contributions Bill 2013-14, presented to Parliament on 14 October 2013, and is subject to Parliamentary approval.
The guidance covers eligibility for the allowance, how to claim it and employers that are excluded.
It specifies that an eligible employer can only claim the £2,000 allowance against one PAYE scheme even if its business runs multiple schemes and it can use its own payroll software, or HMRC’s Basic PAYE Tools to make the claim. Employers who are exempt from filing, or unable to file online, can claim the allowance at the beginning of the tax year using the paper Employer Payment Summary.
The guidance also provides examples of ‘excluded employers’ who cannot claim the allowance. They include those who employ someone for personal, household or domestic work (e.g. a nanny, au pair, chauffeur, gardener, care support worker); those who already claim the allowance through a connected company or charity; and those who, unless they have charitable status, carry out functions either wholly or mainly of a public nature (e.g. NHS services, General Practitioner services, debt collectors for a government department).
In addition to the main guidance, HMRC have published a further guidance in the form of FAQs (with examples) on eligibility, claiming, record keeping and penalties in relation to the employment allowance.
HMRC’s guidance is available at GOV.UK.