Employment Allowance eligibility reforms

08 July 2019

A technical consultation has been published which seeks views on the draft regulations and related documents that will reform the eligibility rules for the Employment Allowance by targeting it at smaller businesses from April 2020.


Geographical extent – United Kingdom


HMRC welcome comments on the draft documents, which will be of most interest to employers and businesses, particularly those which are larger or that are in receipt of state aid, and especially if it is state aid provided under the de minimis rules.


The draft legislation will provide that employers with a Class 1 secondary National Insurance liability of £100,000 or more in the preceding tax year are ineligible for the Employment Allowance.


To claim the Employment Allowance, employers must have space for the full Employment Allowance (currently £3,000) within their relevant de minimis state aid threshold.


The draft statutory note sets out the information requirements for employers claiming the Employment Allowance from April 2020.


The draft tax information and impact note will help explain the potential impact of the proposals on the economy, business, individuals, and other areas.


The regulations will be made under powers in section 5 of the National Insurance Contributions Act 2014 and, as has been previously announced, a final version of the regulations and guidance will be published in October 2019.


The legislation is intended to take effect from 6 April 2020.


This consultation closes at 11:45pm on 20 August 2019


CIPP comment

The CIPP Policy team will be publishing a survey to gather the views of payroll professionals and others with a vested interest. We also plan to hold a Policy  think tank roundtable meeting which will be open to full, fellow and chartered members – to note your expression of interest please email us at policy.