National Insurance Employment Allowance

The National Insurance Employment Allowance is a valuable relief that allows eligible businesses to reduce their Employer’s National Insurance Contributions (NICs). From 6 April 2016, this allowance increased from £2,000 to £3,000, providing even more savings for employers.

For many businesses, this increase represents a welcome financial boost, reducing payroll costs and freeing up funds for investment and growth.

Who Can Claim the Employment Allowance?

The National Insurance Employment Allowance is available to most employers, including:

  • Limited companies with more than one employee.
  • Charities and certain not-for-profit organisations.
  • Businesses that pay Employer’s National Insurance Contributions.

The allowance offsets up to £3,000 per year against Employer NICs, reducing the overall payroll tax burden.

Changes for Sole-Director Companies

One important change from 6 April 2016 is that companies where the sole employee is a director can no longer claim the Employment Allowance. This means:

  • If a company has only one director and no other employees, it is not eligible for the allowance.
  • If there are multiple directors or other staff members, the business can still claim the £3,000 reduction.

This change primarily impacts small limited companies, many of which previously benefited from the allowance.

How We Can Help

At Lewis Brownlee, we help businesses navigate payroll and tax relief schemes, ensuring they take full advantage of National Insurance Employment Allowance where eligible. Our services include:

  • Assessing eligibility for the £3,000 allowance.
  • Payroll and tax efficiency advice for directors and business owners.
  • Ensuring compliance with HMRC’s evolving rules.

If you’re unsure whether your business qualifies, or if you need payroll support, contact us today via our contact page. Plus, know that we offer a free, introductory meeting so that you can find out how we can help. So, if you are curious or want to know how we can help, book your no obligation meeting today. Together, let’s see how we partner in your NI success!

Make sure you’re claiming every tax-saving opportunity available—speak to our experts today!