With the major change to the Employers NI contributions and thresholds which has taken effect this month, here’s what you need to know about the changes and who is eligible to claim employment allowance.
Secondary Threshold
This the figure at which Employer Contributions start. The threshold has been reduced from £9,096 to £5,000, meaning employer National Insurance deductions will start being deducted when the employee earns over £416.67 in any month.
In addition, the Employer National Insurance rate has been increased to 15% on any earnings above £416.67 per month.
Employment Allowance
The employment allowance has been increased from £5,000 to £10,500.00 p.a.
Historically employers who had a NI liability that exceeded £100k p.a. could not apply for the Employment Allowance, but this has been abolished from April.
So does that make you eligible to claim employment allowance?
Who can claim:
- Companies with two or more Directors earning above the Secondary threshold
- Companies with one or more employees’ earnings above the threshold
Who cannot claim:
- Single Director companies
- Directors who have more than one company – only one can claim
- You employ someone for personal, household or domestic work (e.g. nanny/gardener) unless they are a care or support worker.
- You are a public body or business doing more than half your work in the public sector (e.g. local councils/NHS services) unless you’re a charity
- You’re a service company working under (old) IR35 and your only income is the earnings of the intermediary
Contact Maryann Hunter for more information by emailing payroll@randall-payne.co.uk or call 01242 776000.
