As we approach the start of a new financial year, you may not be aware of the ‘Employment Allowance’ scheme, which if eligible, entitles employers to reduce their employer Class 1 National Insurance Contributions (NICs) by up to £2,000 each tax year.
The allowance is not given automatically; it has to be claimed by employers. If Curle & Company currently provide your business with a payroll service, then this allowance will be claimed for you. However, if your payroll is done in-house or by another provider; please check that a claim is made to avoid losing out.
Once you have opted in, the allowance will be offset against each monthly Class 1 NIC payment that is due to be made to HMRC until the full £2,000 has been used, or the tax year ends.
If your monthly total Class 1 NIC liability is £200 (per month) your full allowance (£2,000) will be used by month 10 in the tax year. You will be required to pay the employers Class 1 NIC liability for months 11 and 12.
The employment allowance applies per employer; therefore, regardless of how many PAYE schemes an employer operates, each employer can only claim one allowance.