Employment Allowance – Have you claimed your £2,000 off your employer National Insurance Contributions (NICs) yet?
There is still time to claim your Employment Allowance through your payroll.
From 6 April 2014, virtually all employers (businesses and charities) have been able to claim the Employment Allowance, which enables up to £2,000 per year off employers Class 1 NICs to be deducted from the money you pay to HMRC. Many employers have already claimed and this is easy to do through your payroll or HMRC’s Basic PAYE Tools.
If you haven’t claimed your Employment Allowance yet, you can do this now. All you need to do is check your eligibility and then claim through your payroll. This is likely to be ticking a box, or something similar depending on your payroll software.
If you make payments to HMRC monthly, you will have already had the opportunity to make an Employment Allowance NICs deduction from your payments to HMRC. If you pay HMRC quarterly, before your next payment due on 19 or 22 July, make sure you have claimed your Employment Allowance, so you can make a deduction to the payment you make to HMRC.
You can claim the Employment Allowance after the start of the tax year as long as your business or charity has employer Class 1 NICs liabilities and is eligible to claim the Employment Allowance. For example, if you make your claim in June, your Employment Allowance deduction against your year to date Class 1 NICs liability will be your employer Class 1 NICs liability to date (up to the £2,000 annual maximum) as shown on your last Full Payment Submission.
You indicate on your payroll on 30 June that you want to claim your Employment Allowance for 2014 to 2015. July will be the first month you can use the allowance against your employer Class 1 NIC liability.
Your employer Class 1 NICs liabilities have been £200 per month since April 2014, so year to date employers Class 1 NICs total £600. This means when making your July quarterly payment to HMRC, you should deduct your £600 employers NIC from your payment to HMRC (so, in this example, your payment will simply cover your PAYE and employee NICs).
An example for monthly payers claiming late is given in the Further Guidance on claiming the Employment Allowance.