The Government has announced details of the Employer’s National Insurance relief being introduced from April 2014.
This will allow most employers to save the first £2,000 of Employer’s National Insurance Contributions their business incurs each year.
How will the Employment Allowance Work?
If you use payroll software or HMRC’s Basic PAYE Tools, you will be able to reduce your employer Class 1 NICs payment by an amount of Employment Allowance equal to the employer Class 1 NICs due, but not more than £2,000 per year.
If you owed £700 in Employer’s NIC in April, May and June, you would reduce the April and May payments by £700 each and the June payment by £600. That’s your £2,000 saved!
If you outsource your payroll to Accountancy Edge, we’ll make sure it’s all done for you.
Who won’t it help?
Yes, there’s a catch or two.
Obviously if you work for your own limited company and don’t draw a salary large enough to generate an Employer’s NIC liability, then there’s nothing for you to save.
If you trade through a company caught by IR35, again there’ll be no allowance because you aren’t paying Employer NIC’s.
If more than 50% of your work is in the public sector, it won’t apply.
And you can’t use it to subsidise the cost of having a nanny, an au pair or chauffer. Sorry.
There’s a full list of exclusions here.
Do you need help with your payroll?
If you don’t want the stress and hassle of running your own payroll, then Accountancy Edge can lift that burden. We offer a full payroll service. Contact us today for more information.