Employment allowance – six month update

Source: HM Revenue & Customs | | 13/11/2014

The employment allowance of £2,000 per year for all businesses and charities was made available from April 2014. The allowance is offset against the employers Class 1 secondary NICs and can be claimed as part of the normal payroll process through the regular payroll processes. The maximum amount available is capped at £2,000 per year.

Figures released on 7 November 2014 revealed that over 850,000 employers across the UK have benefited from the employment allowance. This number is expected to increase over the remainder of the year. A recent survey of small businesses has shown that the savings are being used by some to recruit new staff, increase wages, invest in new equipment and premises and for staff training.

John Allan, National Chairman of the Federation of Small Businesses (FSB) said:

‘We’re really pleased to see so many businesses already taking advantage of the Employment Allowance. We called on government to help small employers invest in staff, and now we see how this additional support has been spent.

There are a number of excluded employers who cannot claim the employment allowance. These employers include where someone is employed for personal, household or domestic work, such as a nanny or au pair and functions that are either wholly or mainly of a public nature. In addition, no allowance is available for deemed payments of employment income.’