Businesses, Charities and Community Amateur Sports Clubs (CASC) will be able to reduce their Class 1 Employer National Insurance Contributions (NIC’s) by up to £2,000 per year from 6th April 2014, in a bid to reduce the barriers faced by small businesses who wish to grow, by supporting them with the costs of employment.
Some 1.25million employers will benefit, with over 90% of these being sme’s, of which some 450,000 sme’s will no longer pay Class 1 Employers NIC’s. If you have fewer than 10 employees, you can expect to see your Class 1 Employer NIC’s reduced by 80%
The Employment Allowance will be straightforward to claim using standard payroll software and HMRC’s RTI system. HMRC will add a facility to the RTI Employer Payment Summary (EPS) referring to the employment allowance in the form of a ‘yes/no’ indicator, which has to be completed just once.