Businesses and Charities
From the 2014 tax year Businesses, Charities and Community Amateur Sports Clubs are able to claim up to £2,000 each year to offset against their National Insurance bill.
The allowance relates to the Employers NI only and doesn’t extend to areas such as Class 1A (Class 1 only).
Businesses can be companies, partnerships and sole traders. However, the allowance is NOT available to domestic employers (nanny, au pair, care worker, chauffeur, gardener etc). Neither will personal service companies will not be able to set the allowance against any additional NIC payable resulting from a deemed salary calculation.
If you are eligible Dataplan Payroll will manage this for you and make the relevant adjustment to your PAYE automatically with the correct amount automatically calculated and deducted from the payment to HMRC each month.
Public Sector exclusions
A further category of exclusions If you carry out functions either wholly or mainly of a public nature (unless you have charitable status), for example:
• Public Authority
• Local, district, town and parish councils
• NHS and General Practitioner services
• Managing of housing stock owned by or for a local council
• Providing a meals on wheels service for a local council
• Refuse collection for a local council
• Prison services
• Collecting debt for a government department
Multiple PAYE schemes
If in some cases there is one employer but with more than one PAYE scheme, only one Employment Allowance would be available.
Education complexity
Generally, publicly funded schools fall under the Public Sector Exclusions noted above, particularly those which are funded and controlled by local education authorities and will not be eligible for the Employment Allowance.
However, if a school is an Academy and has a charitable status, the Employment Allowance is available to them.
Further reading
Please find below 2 links that may be found useful.
1) The first is to HMRC’s Employer Bulletin 46, pages 7 and 8 provides some guidance on Employment Allowance - Read more here
2) The second link is to Gov.uk’s website, provides general advice on the allowance - Read more here
From April Dataplan will manage this allowance for you as a part of the PAYE that we calculate if you are eligible.
