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Employment Allowance upon change of circumstances

Reclaiming Employment Allowance

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A limited company with a sole director paid above the NI SET was not eligible to reclaim the Employment Allowance. However part way through the year the company has employed another member of staff paid above the NI SET and so the full Employment Allowance is reclaimable for the tax year.

The question is, is it only allowable against Employers NI (for both the director and employee) from the date the new employee was employed, or can it now be applied retrospectively to the Employers NI paid on the directors remuneration before the new employee was taken on ?

Many thanks.

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RLI
By lionofludesch
22nd Jan 2019 15:45

Whole year.

Surprised your director was being paid above the threshold though.

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By pdorrington
22nd Jan 2019 16:06

Insufficient profits/reserves to pay dividends hence director being paid remuneration.

So basically a sole director company with no other employees and paying ER's NIC could employ a second employee for just one month only (in March) and then offset the full years Employment Allowance against the ER's NIC on the directors remuneration in the previous 11 months which was previously ineligible as a result of the company not employing any other staff ?

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Replying to pdorrington:
RLI
By lionofludesch
22nd Jan 2019 16:13

pdorrington wrote:

Insufficient profits/reserves to pay dividends hence director being paid remuneration.

So basically a sole director company with no other employees and paying ER's NIC could employ a second employee for just one month only (in March) and then offset the full years Employment Allowance against the ER's NIC on the directors remuneration in the previous 11 months which was previously ineligible as a result of the company not employing any other staff ?

Yes.

Another well-considered piece of legislation drawn up over a pint in the pub.

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