Changes to the criteria for claiming Employers Allowance

One of the changes coming with the new tax year will see an amendment to the criteria for employers hoping to claim an allowance against their National Insurance (NI) bill.

What are the changes?

Currently all employers can claim relief of the first £3,000 on their Employer’s National Insurance each tax year. From April 2020, this will be restricted, so businesses and charities with large payrolls could lose this benefit. From 6 April, employers whose Employers National Insurance bill exceeded £100,000 in the previous tax year will no longer be eligible for the allowance. The current government will, however, be upholding their pledge to increase the allowance to £4,000 in the new tax year.

Are you eligible for Employers Allowance (EA)?

As well as the previously mentioned Employers NIC bill total, there are a couple of points to consider when determining your eligibility. Firstly, the £100,000 cap should be calculated as a combined total of all payrolls within a group companies. If one company within a group is under the £100,000 limit, but the group total is over, then none of the group companies will be eligible to receive EA. It is worth noting that there is no automatic qualification; businesses and charities must submit a declaration each year in order to receive EA. The benefit will also count as de minimis state aid, and will contribute towards the total receivable state aid cap in a given 3 year period.

Get in touch

You can find further information relating to the changes on the government website. For advice relating to the changes, or to discuss your eligibility, please email or call 01392241228.