From 6 April 2014 employers can reduce the amount of National Insurance Contributions they pay for their employees by up to £2,000.

The allowance is claimed back through the payroll by reducing the amount of Tax and National Insurance that you pay to H M Revenue & Customs. Your payroll software should make the claim for you.

The new measure applies to businesses, charities and community amateur sports clubs. There are a few exclusions.  You cannot claim the Employment Allowance, for example if you:

  • employ someone for personal, household or domestic work, such as a nanny, au pair, chauffeur, gardener, care support worker;
  • already claim the allowance through a connected company or charity;
  • are a public authority, this includes; local, district, town and parish councils;
  • carry out functions either wholly or mainly of a public nature (unless you have charitable status), for example:
    • NHS services
    • General Practitioner services
    • the managing of housing stock owned by or for a local council
    • providing a meals on wheels service for a local council
    • refuse collection for a local council
    • prison services
    • collecting debt for a government department

If you are not sure whether you can claim, or if you have any questions, speak to your usual contact at Young & Co.