Single-director companies will not be eligible to claim the National Insurance Contributions Employment Allowance for the new tax year 2016-17. The employment allowance for the new tax year 2016-17 will be £3,000, an increase from £2,000 from 2015-16.
A Technical Consultation on Companies Excluded from the NICs Employment Allowance has been published to seek comment on the draft secondary legislation to implement the new exclusion. The consultation will run until 3rd January 2016.
The main reason for this change is to make the Employment Allowance more focused on businesses that are creating and sustaining employment and as a result where a director is the sole employee of a limited company this company is excluded from availing of the Employment Allowance. These regulations will apply in England, Wales, Scotland, and Northern Ireland.