Employment Allowance: are you claiming?

10 April 2015

From April 2015 individuals who employ personal carers are eligible to claim the Employment Allowance.

Some individuals who are entitled to claim the Employment Allowance, perhaps you or your clients, are still not claiming the £2,000 allowance. Make sure you are claiming your entitlement.

Previous CIPP News

Extending Employment Allowance to individuals employing personal carers - 11 December 2014

Following the announcement in the Autumn Statement that the Employment Allowance is to be extended to employers of personal carers, HMRC has published a document giving further details.

The HMRC paper explains that the change which has been announced will help individuals who need to purchase care for themselves or others, and will take effect from 6 April 2015.

The current restriction remains applicable to all other employers who employ staff for purposes connected with their personal, family or household affairs.


NICs Employment Allowance - 28 January 2015

At the last Employment and Payroll Group (EPG) a member raised a question regarding individuals who employ carers.

As announced in the Autumn Statement, we know that from 6 April 2015 individuals who employ carers will be able to claim the National Insurance Contributions (NICs) Employment Allowance. The question asked at the EPG asked was:

"Is this only for those receiving funding from local authorities or does it include private funded cases?"

We asked HMRC and they advise the following:

“Individuals employing a care and support worker will be eligible to claim the Employment Allowance, irrespective of whether they are using NHS direct payments/funds from local authorities or private funds to pay them. In other words, you will be eligible to claim the allowance if you are paying the carer using your own money or NHS direct payments.

However, if the individual employing the care and support worker is also a sole trader and has already claimed the Employment Allowance for their business, they cannot claim a second employment allowance.”


NICs Employment Allowance - 17 March 2015

A number of members have asked about the changes to the Employment Allowance from 6 April 2015. In particular the definition of a care and support worker and whether a nanny looking after a disabled child was a carer or a nanny?

The regulations which were laid on 4 March now identify the additional criteria for which an employer can claim the allowance. The amendment reads:

2.In section 2 of the National Insurance Contributions Act 2014 (exceptions), after subsection (3) insert—

“(3A)But the liabilities mentioned in subsection (3) are not “excluded liabilities” by virtue of that subsection if all the duties of the employed earner’s employment which relate to P’s personal, family or household affairs are performed for an individual who needs those duties to be performed because of the individual’s—

a) old age,

b) mental or physical disability,

c) past or present dependence on alcohol or drugs,

d) past or present illness, or

e) past or present mental disorder.”.

This confirms therefore any member of staff (domestic/nanny) not required to undertake their duties due to one of the above criteria would not qualify for the employment allowance.