The National Insurance ‘Employment Allowance’ was launched in April 2014. Essentially it means that a business will be excused payment of the first £3,000 of employer’s NIC.
The Government hopes that it will encourage small firms, especially, to take on more staff however, a firm will be entitled to the allowance whether or not it takes on new staff. A one-man company is currently able to claim the allowance against employer’s contributions due on remuneration paid to the proprietor-director (unless the relevant earnings are caught by the IR 35 legislation). The allowance is not available for domestic staff such as a nanny but can be claimed for a personal carer or support worker. The employer makes the claim as part of the usual PAYE Real Time Information (RTI) submission. He is able to use HMRC’s Basic PAYE Tools to do this and the formal claim is by way of ticking a box on his EPS submission.