How do I claim employment allowance?

Summary

The Employment Allowance is available from 6 April 2014. If you are eligible you can reduce your Employer Class 1 NICs by up to £2,000 each tax year.

More Information

You can claim the Employment Allowance if you are a business or charity (including Community Amateur Sports Clubs) that pays employer Class 1 NICs on your employees’ or directors’ earnings.

If your company belongs to a group of companies or your charity is part of a charities structure, only one company or charity can claim the allowance. It is up to you to decide which company or charity will claim the allowance.

You can only claim the £2,000 Employment Allowance against one PAYE scheme - even if your business runs multiple schemes.

You can find more information about Employment Allowance on the HMRC website.

If you can claim

If you are entitled to claim Employment Allowance then you must send an Employer Payment Summary (EPS) each calender month and Platinum will automatically claim the Employment Allowance when you do.

The Employer National Insurance Contribution total will be reduced by the value of £2000. If your Employer N.I.C is lower than £2000 a period it will be spread over the course of multiple periods. This will be shown on the Employer Payment Summary (EPS) and currently not on the P32 print out.

If you cannot claim

If you are not entitled to claim Employment Allowance then you will need to switch off this setting in Platinum:

1. Go to " Payroll Payroll Parameters/Maintenance Payroll Parameters Company Parameters General Company Details".
2. Change "Employment Allowance?" to 'N'.

After you do this then Platinum will no longer claim Employment Allowance in your monthly Employer Payment Summary (EPS). For the tax year ending 5th April 2015, you may find that it is still displayed on the [Summary] tab when you are filing the EPS even with the flag set to 'N', but so long as you are sure that the flag is set to 'N', then the correct information will be sent to HMRC and you may ignore it.

See also

• How do I Close a Payroll Period?
• Employer Payment Summary (EPS)
• Employment Allowance: up to £2,000 off your Class 1 NICs

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