How to Claim Employment Allowance

Article showing the changes to employer allowance

The reporting of employment allowance is changing.

From April 2020, eligible employers are entitled to claim up to £4,000 off their employer national insurance costs. However, where their claim would previously be rolled over into the new tax year, now, due to Brexit the process has changed.

Employment Allowance is now classed as a State Aid so employers will need to submit a fresh claim to HMRC each year.

Whilst payroll software may vary, the new submission requires an answer to two questions:

  1. Is state aid applicable? Yes or no.
  2. What industry is the business operating in? Fisheries & Aquaculture, Agriculture, Transport or Industrial. If your business doesn’t fall into one of these categories, you should specifically indicate your industry.

For more information on the changes, to check if your business is eligible and whether state aid is applicable to your business, visit https://www.gov.uk/guidance/changes-to-employment-allowance.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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