Employers NIC Allowance

Employers NIC Allowance

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Hello,

My wife has a sole trade business with about 6 employees, she does her own payroll and claimed the Employers NIC allowance in full from April to Aug 14.

She converted to a partnership in August 14 with me as a partner and has a new payroll scheme for the partnership. We have claimed employers NIC allowance for the partnership also. To be honest we didn't think anything of it at the time. I just suddenly had a thought that this might not actually be allowed??!

I can't find any guidance on the Gov.uk website on this scenario. It's all about companies.

Asked Moneysoft, who are usually kind enough to answer general (non software) payroll questions and they didn't know.

Also spoke to employers Helpline on HMRC, the bloke didn't know and gave me a different number to ring. But I thought I'd ask here first.

There have been a good few FPS's submitted on the new scheme as we are now in Jan and we haven't heard a single complaint from HMRC.

I'm a bit worried now....

Any help appreciated, thanks in advance.

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Euan's picture
By Euan MacLennan
19th Jan 2015 10:24

You should be worried

Forget the HMRC helpline and any "guidance" you might find on Gov.uk.  Go straight to the law.

s.1(2)(b) NICA 2014 says that the amount of the allowance is £2,000 or if less, the amount of employer's NICs which are not excluded liabilities.  s.2(6) & (7) NICA 2014 says that when a business is transferred from Q (sole trader) to P(partnership) during the year, P(partnership)'s NICs are excluded liabilities.

The partnership cannot claim a second £2,000 in 2014/15.

In Moneysoft, freeze the PAYE actually paid by unticking all the 'Pay the total due' boxes, then untick the 'Claim NIC allowance' box in Employer Details.  Moneysoft will schedule an EPS to disclsim the EA and will calculate the extra PAYE due for the current month.

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