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No change to the Employment Allowance for 2021/22 Tax year

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No change to the Employment Allowance for 2021/22 Tax year

Employment Allowance (EA) allows certain businesses who employ workers to reduce their annual National Insurance (NI) bill by up to £4,000 (for the 2021/22 tax year).

For eligible businesses, the Employers NIC liability to be will be reduced by up to £4000.00 in the 2021/22 tax year, allowing the EA claim to be made via payroll real time information submissions.  This will reduce the PAYE due to be paid over to HMRC.

This remains the same process and amount as the 2020/21 tax year.

 A change in communication from HMRC

HMRC have started sending some employers notices to advise that they may be eligible to claim Employment Allowance for the 2021/22 tax year.. The new notice sent by HMRC is in response to the EU regulations

 In order to create a level playing field, the European Commission sets limits on how much assistance can be given without prior approval to organisations operating in a competitive market HMRC are therefore now sending clients a ‘de minimis’ offer letter for the value of the aid under the EA scheme.

If the employer makes a subsequent claim for any state aid during the tax year, they will be required to declare the full Employment allowance amount stated in the notice, if asked, to any other awarding body. After the end of the year employers can declare the amount stated in the notice or the value of the employment allowance actually received.

No additional action required

For Businesses that are already claiming EA through the payroll there is not additional action or application that needs to be made.

dhpayroll will  continue to make the Employment Allowance reclaims through the payroll  for all our eligible clients, and no further action is required unless there is a change in circumstances that effects eligibility.

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