An employer gets £3,000 off their Class 1A (Secondary) National Insurance in each tax year.
The question arises – can two or more companies in a group claim £3,000 each.
The answer is No, only one of the group companies can claim employment allowance. Tax payer decides which company gets it.
I would highly recommend a read through the technical guidance link given below:
a) HMRC even includes unincorporated businesses in connected businesses.
b) Besides share-holding and control as under Corporation Tax Act 2010, HMRC has included within connected businesses – economically interdependent businesses as well.
Technical guidance in this case is highly readable with lots of examples.
Sources:
Technical guidance: Connected companies
PS – I came across this little gem of information among audience questions today on HMRC Webinar: Employers – what’s new for 2018. I will highly recommend subscribing to these webinars. They are free !
October 2019
HMRC’s latest Agent Update Issue 74 informs that from 6 April 2020 Employment Allowance will be restricted to employers with NICs liabilities of under £100,000.
That is employers will need to look at their last tax year’s Employer NIC expense and if its over £100k they cannot claim £3k Employment Allowance.
If employer is part of a group Class 1 NICs liabilities of all companies, and/or PAYE schemes, needs to be added together to assess eligibility for Employment Allowance.
May 2023
If one group company cannot claim full balance, balance cannot be transferred to another company.
Sep 2024
The Employment Allowance can only be used against your employer Class 1 NICs liability. It can not be used against Class 1A or Class 1B NICs liabilities.
Source : Claiming Employment Allowance: further employer guidance.
Roy Accountants 