Employment Allowance - Is Your Business Eligible?

Following recent changes announced in the Spring Budget - the eligibility criteria for employers to claim back 'Employment Allowance' towards their National Insurance Contributions (NIC) bill has changed.

Whilst all employers have been hit by the changes to the ER Class 1 NIC rate (increased from 13.8% to 15%) and the reduction on the threshold at which the employer pays NICs (£9100 to £5000 per year), you may now be eligible to claim money back against the NICs that you pay to HMRC.

Previously, only employers with a Class 1 NIC bill of less than £100,000 per year were eligible to claim the allowance.

However, the £100,000 threshold has now been scrapped and all employers can claim the employment allowance from the 25/26 tax year onwards, with the allowance now also having increased from £5,000 to £10,500 per year.

The only exception applies to 'connected companies', whereby only one company within that connection or group can claim back the allowance. 

If you are unsure on whether you are eligible to claim Employment Allowance, please feel free to reach out to our payroll team for further assistance: payroll@theinkgroup.co.uk