Chapter 8 - 2.5 - Employment Allowance

Question 1

What is the employment allowance?

Answer 1

An allowance given to employers to reduce their total class 1 secondary NIC liability

Question 2

What is the employment allowance for the year 2023/2024?

Answer 2

£5,000 per annum per employER (not employee)

Question 3

What happens if the employer’s liability is less than the allowance?

Answer 3

The employer pays no class 1 secondary NICs for the year

Question 4

The employment allowance is not available to some employers:

Answer 4

• companies with a single director and no other employees
• those with a class 1 secondary NIC liability > £100,000 in the previous tax year