Newsflash: NIC – employment allowance

minimum wage - purse with penny coinFrom 6 April 2014 employers can reduce their National Insurance Contribution (NIC) bill by £2,000, called the “employment allowance”.  In order to do so employers need to remember to claim for the allowance.

The employment allowance can be claimed by any business or charity (subject to a few exceptions such as businesses with a public function) that pays NICs on employees’ or directors’ earnings.  It is set against the employer’s entire Class 1 NIC liability each week or month until the maximum £2,000 entitlement is used up.

There are some special rules for groups of companies or where more than one PAYE scheme is in operation.

For further information please see the HMRC’s factsheet available here.