RTI: Update

Employment allowance

From 6 April 2016 qualifying employers can claim up to £3 000 employment allowance. Employers need only claim the allowance once through the employment payment summary. It is then automatically allocated by HMRC for each subsequent tax year.

However payroll software may require employers to indicate each year that they are entitled to claim. Employers without access to the employment payment summary through their payroll software can claim using HMRC’s basic PAYE tools.

Since announcing that the sole director of a company of which they are also the only employee is not allowed to claim the employment allowance HMRC has confirmed that this includes small companies where there are several employees but the director is the only employee paid above the National Insurance secondary threshold. This effectively closes a loophole in HMRC’s original guidance.

Therefore to qualify for the employment allowance ...