Are you taking advantage of this rare allowance for UK businesses worth up to £2,000?

You may have read in your letter from Dave (Mr Cameron) that from the 6^th April the employment allowance is available for most businesses that pay employer’s Class 1 National Insurance contributions on their employees’ or directors’ wages. It is also available for Community Amateur Sports Clubs and Charities.

The allowance has been granted to help small businesses and boost employment. Although it is a generous allowance and we certainly don’t get many of them, it is a shame that HMRC are giving with one hand and taking it away with the other, with the removal of the SSP reimbursement scheme.

HMRC tell us that you cannot claim the Employment Allowance if you:

• employ someone for personal or domestic work, such as a nanny, au pair, chauffeur, gardener, care support worker;
• already claim the allowance through a connected company or charity;
• are a public authority, this includes; local, district, town and parish councils;
• carry out functions either wholly or mainly of a public nature (unless you have charitable status), for example:
  • NHS services
  • General Practitioner services
  • the managing of housing stock owned by or for a local council
  • providing a meals on wheels service for a local council
  • refuse collection for a local council
  • prison services
  • collecting debt for a government department

The second point is probably the most crucial and will affect a number of businesses. Basically if you have more than one business, you may not be entitled to claim the allowance for both. I would advise that you contact a professional for clarification.

You should make the claim for the allowance through your payroll software – this is generally a tick box. Don’t worry if you didn’t get a letter, if you qualify you should still make the claim.

If you need any help with payroll or making this claim, please contact Change Accountants.