Employment Allowance – additional detail needed via RTI returns

01 August 2019

From April 2020, the Employment Allowance is to be restricted to employers who have a secondary NIC liability of <£100,000 in the preceding tax year.


As a result of restricting who can claim this amount (maximum £3,000 per tax year) HMRC now view the Employment Allowance as de minimis state Aid and as such will need to monitor how much is claimed as well as ensuring that employers do not exceed the amount that they are allowed to claim over a period of three years.


Summary of tax year 20-21 projects for software developers provides confirmation that the employer will need to submit on the EPS (Employer Payment Summary) the following information:


  • the employer will need to report on their EPS the amount of de minimis state aid received up to a ceiling for their industry sector, or confirm that State Aid does not apply,
  • the amount will need to be reported in Euros, using a rate announced by HMRC on 1 April.

From 2020-21 an existing Employment Allowance claim will not be rolled forward from the previous year and will require the employer to make a fresh claim each year.;


A new Generic Notification Service (GNS) message will be used to advise when a claim is rejected, based on the £100k NICs limit, de minimis State Aid limit for industry sector or for some other reason is ineligible.


Payroll software will need to be able to support the current process for Employment Allowance claims relating to tax years up to 2019/20 together with a new process for 2020/21




CIPP comment


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