Employment Allowance – up to £2k for employers
As announced by the Chancellor in his 2013 Budget, from 6th April 2014 the new Employment Allowance comes into effect. This will allow most employers who pay Employer’s National Insurance to be able to claim up to £2,000 against these costs.
This allowance is deducted from the first £2,000 of Employer’s National Insurance in the 2014/15 tax year. So if your 5th May 2014 Employer’s National Insurance liability is greater than £2,000 you can claim the full allowance in that month. Only a few employers are excluded and group companies will only be entitled to the allowance once across the group.
Employers who do not have any Employer’s National Insurance costs may miss out on this allowance. However, for some small shareholder owned companies, with some careful planning, they can change the way they pay themselves slightly and benefit from an overall tax saving of up to £180 per year.
This is a good tax cut for the majority of employers and especially if their annual Employers National Insurance bill in more than £2,000. If you need assistance claiming your Employment Allowance then contact us for free advice.
You can follow Tony Rookes of Southgates, Chartered Certified Accountants on twitter – @southgatesACCA.