From 2014 every business, Charity and CASCs (Charities and Community Amateur Sport Clubs) will be entitled to an annual “employment allowance” of £2000 to reduce their liability for Class I secondary NICs.
It is expected that up to 1.25 million employers will benefit, with over 90 per cent of the benefit going to small businesses with fewer than 250 employees and it is envisaged that on average, employers with fewer than ten employees will see their employer NICs bill reduced by 80%.
To simply matters HMRC will introduce a new tick box on EPS referring to the employment allowance in the form of a “yes/no” indicator.
To claim the allowance, the employer will have to signify his intention to claim by completing the yes/no indicator just once. The employer will then offset the allowance against each monthly Class 1 secondary NICs payment that is due to be made to HMRC until the allowance is fully claimed or the tax year ends.
This Employment Allowance will apply per employer regardless of how many PAYE schemes that employer chooses to operate.