With effect from 06th April 2014, an NIC Employment Allowance is available to claim by eligible employers.
Businesses, Charities and Community Amateur Sports Clubs who are eligible to claim the Allowance are able to reduce their NICs bill by up to £2,000 per year. The Employment Allowance is to be set against an employer’s liability for secondary Class 1 National Insurance Contributions (NICs) only, not against other NICs such as primary (employee’s) Class 1, Class 1A or Class 1B contributions.
You cannot claim the Employment Allowance, however, if you:
you employ someone for personal, household or domestic work (eg a nanny or gardener) - unless they’re a care or support worker
- NHS services
- General Practitioner services
- the managing of housing stock owned by or for a local council
- providing a meals on wheels service for a local council
- refuse collection for a local council
- prison services
- collecting debt for a government department
You do not carry out a function of a public nature, if you are:
To check your eligibility and for further information about the Employment Allowance go to Employment Allowance Eligibility.
The claim process for eligible employers is very straightforward and is administered via BrightPay, and is merely a flag on the Employer Payment Summary (EPS) submission via RTI, notifying HMRC that they are claiming the employment allowance. There is no requirement to enter a claim value within the actual EPS submission.
To prepare an EPS for submission you must first set up your HMRC Payments schedule.
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