If you are in receipt of the Employment Allowance the good news is, that it’s increasing from April 2022. The maximum Employment Allowance is currently £4,000 but from April 2022 it will be increasing to £5,000.
Businesses who are eligible for the allowance will be able to claim more against their secondary Class 1 National Insurance liabilities. This means if you are eligible for Employment Allowance you will now be able to claim an additional £1,000. You will make savings on your Class 1 National Insurance each time you run your payroll until either the £5,000 has been used up or your tax year end (whichever comes first).
If you’re a business, charity or community amateur sports club whose National Insurance liabilities were less than £100,000 for the previous tax year then you may be eligible for Employment Allowance.
You can also make a claim if you employ a carer or support worker.
If you run more than one payroll then the £100,000 threshold is for all PAYE combined.
For further information about your eligibility please see HMRC’s website.
How to Claim
You can make the claim for Employment Allowance via your Sage 50cloud Payroll Software. Follow these simple steps:
Go to Company > Settings. In the ?? window you will see a ‘Apply for EA’ button and a tick box ‘Eligible for Employment Allowance’ – you should review both these to confirm your eligibility and to claim the £5,000 if necessary.
When to claim
You will need to make a new claim each tax year. You can make the claim at any point in the year but the earlier you claim the sooner you will get the allowance.
If you make a late claim which means you haven’t used your Employment Allowance against your employers Class 1 National Insurance liabilities you will need to contact HMRC. You will need to ask them to use any unclaimed allowance at the end of the year in order to pay the NIC’s you owe or give you a refund after the end of the tax year if you don’t owe any NIC’s.
You can review how much Employment Allowance you’ve used by logging into your HMRC online account.
Claiming for previous years
You can claim for Employment Allowance for the last four tax years dating back to 2017/2018.
Between April 2016 and April 2020 the allowance was £3,000, it then rose to £4,000 and is about to increase again as mentioned earlier to £5,000.
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