HMRC has recently issued more details of the annual 'employment allowance' of £2,000 to be set-off against employers' NIC bills from April 2014 which make it clear that this will apply for all businesses, charities and Community Association Sports Clubs.
Richard Mannion, National Tax Director at Smith & Williamson, the accountancy and investment management group, said: "Business owners should note that the latest details of the allowance indicate that it will not be given automatically and it will have to be claimed by employers. In order to claim, employers will need to complete the yes/no indicator that HMRC is adding to the Real Time Information Employer Payment Summary (EPS). Payroll software providers will add the same facility, and HMRC will amend its basic PAYE tools to have an EPS facility for employers who do not already have this facility on their software."
Once the employer has opted in, the employer will then offset the allowance against each monthly Class 1 secondary NIC payment that is due to be made to HMRC until the allowance is fully claimed or the tax year ends. The following tax year, the allowance will be available as an offset against a Class 1 secondary NIC liability as it arises during the tax year.
Disclaimer
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
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