You can claim Employment Allowance if you are a business or charity paying employers’ Class 1 National Insurance. You can also claim if you employ a care or support worker.
You will only be able to claim if your Class 1 National Insurance bill was below £100,000 in the previous tax year. Note, if you have connected businesses, eligibility will be based on the combined Class 1 National Insurance for all PAYE schemes.
If you have more than one Employer PAYE scheme, you can only claim Employment Allowance against one of them. If you are part of a group, only one company or charity in the group can claim the allowance.
You cannot claim if:
- You are the director and the only employee paid above the Secondary Threshold.
- You employ someone for personal, household or domestic work (like a nanny or gardener) – unless they are a care or support worker.
- You are a public body or business doing more than half your work in the public sector (such as local councils and NHS services) – unless you are a charity.
- You are a service company working under “IR35 rules” and your only income is the earnings of the intermediary (such as your personal service company, limited company, or partnership).
De minimis state aid rules – check if these apply to you.
If you make or sell goods or services, Employment Allowance counts as ‘de minimis state aid’. There’s a limit to how much de minimis state aid you can get.
You must:
- check that you’re within the de minimis state aid threshold
- work out how much de minimis state aid you’ve received
You must do this even if you do not make a profit.
You do not have to do this if you do not make or sell goods or services, for example you’re a charity, an amateur sports club or if you employ a care worker.
Check you are within the de minimis state aid threshold
Employment Allowance counts towards the total de minimis state aid you’re allowed to get over a 3-year period. You must make sure you will not exceed the de minimis state aid threshold for your sector. De minimis state aid and the relevant thresholds are worked out in euros.
Sector De minimis state aid threshold over 3 years
Agriculture products sector £20,000
Fisheries and aquaculture sector £30,000
Road freight transport sector £100,000
Industrial sector / other £200,000
If we can help you with this or any other queries, please do not hesitate to contact a member of our team at HR Services Scotland Ltd on 0800 652 2610.
