TAX - PAYROLL - 22.06.2020

Employment allowance - claiming it correctly

New rules. Employers who are entitled to the NI employment allowance (EA) don’t have to pay employers’ Class 1 NI contributions in respect of employees’ salaries until their total NI bill exceeds £4,000. However, since April 2020 new restrictions apply so that fewer employers are entitled to claim. The new restrictions have been causing confusion so HMRC has issued new guidance to clarify what information employers should include on their payroll reports (see The next step ).

Claims procedure. HMRC says that to ensure you don’t miss out on the EA, or claim it when it isn’t due, you should ensure that the EA indicator in your payroll software is set to “Yes” only if you’re eligible for it. If you don’t check whether or not you’re eligible or you wrongly indicate that you are, you may have to repay all of the EA you receive. You should use the “No” indicator for EA you are not eligible to claim or if you want to withdraw a claim.

For a link to HMRC’s updated guidance, visit http://tipsandadvice-business.co.uk/download (CD  21.19.08).

New rules which have applied since April 2020 require you to check your eligibility for the employment allowance. The change has been causing confusion so HMRC has issued new guidance on the claims procedure.

© Indicator - FL Memo Ltd

Tel.: (01233) 653500 • Fax: (01233) 647100

subscriptions@indicator-flm.co.ukwww.indicator-flm.co.uk

Calgarth House, 39-41 Bank Street, Ashford, Kent TN23 1DQ

VAT GB 726 598 394 • Registered in England • Company Registration No. 3599719