Has everyone else seen this new guidance from HMRC - Employment allowance

Has everyone else seen this new guidance from...

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Has everyone else seen this new updated guidance from HMRC on Employment Allowance and how even 2 director firms are not eligible for Employment Allowance unless they are both being paid over the secondary threshold.  Or if you have lots of low paid employees, the director would not be eligible for Employment Allowance if he was paid over the secondary threshold.  It will affect the salary levels that we are advising our clients (who are directors) to pay out this year and this advice has changed since we asked our tax helpline prior to 5 April 2016!!

New guidance can be found here - https://www.gov.uk/government/publications/employment-allowance-more-det...

It's not as simple as just the number of employees as ever...

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By Portia Nina Levin
08th Apr 2016 11:57

Really?

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RLI
By lionofludesch
08th Apr 2016 12:22

Not sure

I'm not sure why we're hugely bothered about this, bearing in mind that any secondary contributions will be covered by EA anyway.    There's a limited number of clients it's going to affect.

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Stepurhan
By stepurhan
08th Apr 2016 12:33

Yes

See this thread. https://www.accountingweb.co.uk/anyanswers/question/employment-allowance-32

You will note that, as has happened in the past, HMRC guidance and the law are not necessarily the same thing.

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By pauld
08th Apr 2016 12:43

Employment allowance

Is this similar to or replacing the jobseekers allowance?

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By awdeek123
08th Apr 2016 16:59

Still think this ony refers to single director companies

I agree it's a bit ambiguous but all references are to "THE director" and the link to (even) further guidance is clearly for single director companies.  I suspect it's simply slack drafting the HMRC in their eagerness to introduce the fabricated notion of a secondary threshold limit for other employees. 

It maybe doesn't affect many companies in some parts of the country but in the oil sector there are literally thousands of one/two man limited companies who will need the correct interpretation (and we need all the help we can get just now!) 

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Replying to paulwakefield1:
RLI
By lionofludesch
09th Apr 2016 13:47

Not sure

awdeek123 wrote:

I agree it's a bit ambiguous but all references are to "THE director" and the link to (even) further guidance is clearly for single director companies.  I suspect it's simply slack drafting the HMRC in their eagerness to introduce the fabricated notion of a secondary threshold limit for other employees. 

It maybe doesn't affect many companies in some parts of the country but in the oil sector there are literally thousands of one/two man limited companies who will need the correct interpretation (and we need all the help we can get just now!) 

I'm not sure what point you're making here.  Two director companies clearly aren't affected.  Single director companies just need to sign up another employee (Mrs Director?) if they want to claim.   But my point was the vast majority of one-man companies are paying a minimal salary, carrying a few quid in employer's NI. Optimum salary debates abound on this forum but is it worth rejigging your entire remuneration package plan to save three or four hundred pounds in NI ?   Maybe yes, maybe no - it depends on a lot of things.

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Replying to User deleted:
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By Gone Sailing
09th Apr 2016 16:31

Wake me up when it's unanimous

lionofludesch wrote:

Single director companies just need to sign up another employee (Mrs Director?) if they want to claim.

I thought we'd bottomed this out in the "fat [***]" paragraph:

https://www.accountingweb.co.uk/anyanswers/question/it-still-partly-there

 

 

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Replying to User deleted:
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By awdeek123
11th Apr 2016 15:06

I agree with you that "Two director companies clearly aren't affected"  ... my point was to counter the OP's statement: "..... even 2 director firms are not eligible for Employment Allowance unless they are both being paid over the secondary threshold"

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Replying to Arthur Putey:
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By lionofludesch
11th Apr 2016 16:01

Peanuts

awdeek123 wrote:

I agree with you that "Two director companies clearly aren't affected"  ... my point was to counter the OP's statement: "..... even 2 director firms are not eligible for Employment Allowance unless they are both being paid over the secondary threshold"

I see.

Well, that would seem to be HMRC's interpretation of the poorly worded legislation.

Again - how much is at stake ?   Will someone be taking it to Tribunal ?

Probably not soon.

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By pauld
09th Apr 2016 15:13

.

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