Employment Allowance Changes

Employment Allowance Changes from 6 April 2020

 

From 6 April 2020, eligibility rules for claiming the Employment Allowance (EA) will be changing:

 

  • If you’re total (secondary) Class 1 National Insurance contributions (NICs) liability is below £100,000 in the tax year before the claim, you are able to claim EA. If your (secondary) NICs were £100,000 or more in the previous tax year you are no longer eligible to claim EA.

 

If you have more than one payroll in the tax year before the claim, add together the employers secondary Class 1 NICs. If the total amount is more than £100,000 you will not be able to claim EA. If it is under £100,000 you should decide which Company makes the claim. This also applies to connected companies.

 

  • EA is now considered a type state aid. This places a €200,000 ceiling (for most businesses) on the amount of state aid you can receive over a rolling 3-year period. EA cannot push your organisation over this limit. Below is a table that shows the de minimis state aid ceiling for the relevant 3-year period.
Business sector Ceiling
Primary production of agriculture products           €20,000
Fisheries and aquaculture sector €30,000
Road freight transport sector €100,000
Other, industrial (everyone else)   €200,000

 

 

  • EA for eligible businesses is increasing from £3,000 to £4,000 per year.

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