Employment Allowance changes

Karishma Updated by Karishma

As of April 2020, there will also be changes to Employment allowance. Only employers with company NICs below £100,000 will be eligible to claim Employment allowance. A check has been implemented to prevent any companies that pay over £100,000 in NICs from claiming Employment allowance.

Connected companies may be operating in the same group, and it is possible that you that the group may have over £100,000 in NICs, but an individual company does not. Normally, this would mean Payroll does not catch this discrepancy and the employer could claim Employment allowance. Should this occur, from the next year onwards you must untick Claiming employment allowance in the Company details.

Note: Off payroll workers are deemed employees, which are automatically excluded from the employment allowance calculations.

If you are aware of employees other than Off payroll workers who should not be counted towards the NICs, so the £100,000 limit is incorrectly exceeded, then you should tick Override employment allowance checking in the HMRC payments tab of the Company details window:

Legislation has also been added surrounding De minimis state aid and Employment allowance. Should your company fall under one of the categories outlined, you should also tick the relevant box on the same HMRC payments tab in the De minimis state aid sectors. Alternatively, click De minimis does not apply:

Note: If you are not claiming Employment allowance, this information will not be submitted on the EPS. Any values entered do not have to be removed to achieve this, for when you become eligible to claim again.

You must ensure you do not claim Employment allowance if your De minimis state aid would exceed the threshold for your sector(s).

Month-end check report

The month-end check report will include checks to ensure that you are not claiming Employment allowance if your company NICs for the previous year exceed £100,000. A successful check should not be taken as an endorsement to claim. You must make absolutely sure you are eligible to claim, taking into account all the regulations.

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