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PAYE: £2000 NIC Employment Allowance

Author: Mark Thomas
Date: 18th October 2013
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The employers NIC allowance has now moved a step closer to becoming law but what does this mean to employers?

In his 2013 Budget, the Chancellor announced the creation of a NIC’s employment allowance which will potentially be worth up to £2000 for employers.  As yet, the announcement has yet to be transformed into reality but it is looking promising!  If it does move into law, the allowance will become effective at the start of the new Tax year on 6th April 2014.

But, what does this actually mean for employers.  Well, until the final details are actually known and the announcement does become law, it is difficult to provide exact details.  However, based upon the information known at this time, it appears that all businesses (including charities and Community Amateur Sports Clubs) will be allowed to reduce their employers Class 1 NIC liability by up to £2000.  Please note that the employers NIC is the additional contribution paid on top of the employees salary/wage, this allowance will not affect the employees NIC which is deducted from their pay. 

According to current information, to claim the allowance should be fairly straight-forward as it will be dealt with via RTI (Real Time Information) submissions.  The employer will need to notify of their intention to claim the allowance (which should be simply a “yes/no” indicator within the payroll software) and, from that point forward, the employer will offset the allowance against the employers NIC liability due each month until such time as the allowance has been fully utilised or the Tax year ends.

As soon as further information becomes available we will post updated blogs to keep everyone informed but, as always, if you have any queries please do not hesitate to call us.

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