Employment Allowance with changes mid year.

Employment allowance was introduced from 6th April 2014.

Basic guidance

Who cannot claim Employment Allowance

You cannot claim if both of the following apply:

• you’re a company with only one employee paid above the Class 1 National Insurance secondary threshold
• the employee is also a director of the company.

Practice issue

1. An employee starts mid year making the employer eligible for Employment allowance. We need to make the claim and the claim will start from the beginning of the year. see link with examples.

2. An employee leaves mid year making the employer ineligible for Employment allowance. Company can still claim employment allowance for the current tax year but stop from next year. see link

There is no pro-rata of employment allowance, either you get it for full year or not.

A must read publication for all HMRC agents doing payroll Employer Bulletin.