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Employment Allowance Eligibility

1 Director and 1 Employee paid monthly with varible pay

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I have a company in which I am the sole director. I also have one employee who has now reduced to part time working from April 2022. Both I and my employee are paid monthly.  His Gross pay will exceed the monthly secondary NI threshold in some months but not in others. I estimate his overall income for the 22/23 tax year will be under £9,100. 

On the basis that my employee's gross pay will exceed the monthly secondary NI threshold in at least one month, can I claim employment allowance for my company in full  ? 

 

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By Wanderer
27th Apr 2022 10:37

Yes, doesn't fall under the relevant exclusion:-
Excluded companies
(4A)A body corporate (“C”) cannot qualify for an employment allowance for a tax year if—
(a)all the payments of earnings in relation to which C is the secondary contributor in that year are paid to, or for the benefit of, the same employed earner, and
(b)when each of those payments is made, that employed earner is a director of C.

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Replying to Wanderer:
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By Hugo Fair
27th Apr 2022 13:36

But no idea why OP includes the final two words in "can I claim employment allowance for my company in full?"

An EA claim is either made or not ... there is no concept of pro-rating for certain months in the tax year, or of only claiming for certain employees.
Conversely, of course, the claim is for UPTO £5,000 - which will not be the 'full' amount unless there is sufficient NICs to claim against.

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Replying to Hugo Fair:
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By Windy
28th Apr 2022 09:20

Thanks Hugo
Yes I agree - that was badly worded !
I did mean claim employment allowance in respect of the employers NIC arising in each tax month - mainly on my own salary .

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Replying to Wanderer:
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By Windy
28th Apr 2022 09:18

Thank you very much wanderer.
That was my understanding but just wanted to make sure I understood correctly.
So if my part time employee exceeds the secondary threshold in just one month say of the tax year, I can claim employment allowance in respect of the employers NIC arising on my own salary in each month of the tax year.

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