UK Employment Allowance - Changes
Employment Allowance for all companies whose NIC bill was more than £100,000 in the previous year will be withdrawn from 2020. Employment Allowance applies generally to all businesses and charities, it is a flat rate scheme which allows you to reclaim a proportion of NIC contributions for employees until i) the limit of £3,000 is reached or ii) the tax year ends
The £3,000 rebate is a good incentive for SMEs and micro-businesses but not all smaller businesses are aware of this incentive. It has been reported that only 59% of micro business have taken up this incentive.
This figure might not be surprising. Tax rules can be complicated and if you’re a start-up or micro business, it’s easy to be uncertain about whether or not you qualify which is why employing expert accountants can be so useful. While this might represent an additional expense, it can also unlock savings by ensuring you claim all the tax breaks to which you should be entitled.
If you haven’t made a claim yet, or you’re worried that you will no longer qualify after 2020, you should relax. As long as your NIC bill isn’t higher than the threshold you will, in all probability, still be able to claim it. If you’re self-employed you may be able to claim this allowance, but only if you have incorporated as a limited company and are paying class 1 NIC on those employees’ earnings.
Acer Accounts can assist you with your taxation, year-end accounts, self-assessment, bookkeeping, accounting and payroll services.