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THAT’S NIC(E)…

10th Feb 2014
QC Development Keytime
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2014 £2,000 NIC Employment Allowance

From April 2014 virtually every business, charity and community amateur sports club (CASC) will be entitled to an annual “employment allowance” of up to £2000 to reduce their liability for Class 1 Employer NICs.

There are some excluded employers, however, and some examples are given below:

  • Those who employ personal, household or domestic staff such as nannies;
  • Are a public authority including local and parish councils;
  • Carry out functions wholly or mainly or a public nature:

o   NHS services

o   GP services

o   Prison services

There is more detailed guidance here:

https://www.gov.uk/government/publications/employment-allowance-more-detailed-guidance

The employment allowance will be delivered through standard payroll software and HMRC’s online RTI system. 

HMRC will add an option to the EPS referring to the employment allowance in the form of a ‘yes/no’ indicator and payroll software providers will do the same.

To claim the allowance the employer will have to signify their intention to claim by completing the yes/no indicator just once.

The employer can then offset the allowance against each monthly Employer’s National Insurance payment that is due to be made to HMRC until either the allowance is fully claimed or the tax year ends.

Any unused allowance cannot be carried forward to next year.

The employment allowance will apply per employer, regardless of how many PAYE schemes an employer has in operation, so each employer can only claim for one allowance.

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Replies (2)

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By janefg
10th Feb 2014 15:08

"personal, household ot domestic staff"
Would this cover someone employing stable staff (grooms, stable hands etc) who is not running a business but whose hobby is show jumping and breeding show jumpers?

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By Andrew Mann Keytime
11th Feb 2014 09:28

I would say that this would not be covered since the wording in the documentation is "you can claim the Employment Allowance if you are a business" and a hobby presumably is not a business. 

 

However, nothing to be lost by asking HMRC to make a ruling here....you can let us all know the result if you do.  :)  

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