Employer allowance – is it worth the hassle?

10th September 2019

The £3000.00 employer allowance ceases at the end of the current tax year. From April 2020 employers will have to re-apply for a di minimis state aid based allowance.

 

A new HMRC checklist will have to completed to declare the following;

 

  1. NIC contributions in the previous tax year were beneath £100,000;
  2. Confirmation that relevant checks have been made on related companies to ascertain eligibility for the allowance;
  3. Confirmation that you are the only company in the group claiming the allowance;
  4. Confirming that the de minimis limits have not been exceeded in the business sector
  5. Declare any state aid received across all related companies for the year of the claim, and for the two years previously, in Euros.

 

Different business sectors are entitled to different di minimis amounts, but these amounts are calculated in euros, no matter if we’re in or out of the EU. Di minimis payments are calculated over a three year period, so even if you don’t receive them now, they can impact on whether or not you qualify for the employer allowance.

 

Of course, if you don’t have any state aid/ di minimis payments, your NI contributions fall beneath the £100K mark & you aren’t related to any other companies that may have applied for the employer allowance or been granted di minimis payments, then it’s carry on as normal (except of course for having to re-apply for the allowance).

 

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