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Employment Allowance Scenario

Employment Allowance Scenario

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I have been looking at the further guidance from HMRC and also directly at the legislation, and there is a scenario that I cannot find an answer to - any assistance the group can offer would me much appreciated.

If a director/main shareholder of a company also has a separate sole trade, or is a partner in a partnership, can both the company and the sole trade/partnership claim the allowance?

I have a couple of clients who fall into this situation, but I would illustrate the more complicated one as follows:-

COMPANY has directors A, B and C who all own shares in equal number

PARTNERSHIP 1 is owned equally by A and B

PARTNERSHIP 2 is owned equally by A and C

Can all 3 claim the £2,000?  The 3 entities carry on similar trades and all have PAYE schemes.  The entities are well-established, so it's not as though we've manipulated the structure at all hoping to get in an extra £2k.

Any thoughts?


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Euan's picture
By Euan MacLennan
01st May 2014 11:51

It depends on the partnership status

If either partnership is an LLP, it is included as a company and the LLP would then be connected to the company as it would be under the same control as the company - only one EA could be claimed between them.

Companies cannot be connected with ordinary partnerships or sole traders, so each of them could claim an EA.

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