{"id":27557,"date":"2025-03-31T13:58:39","date_gmt":"2025-03-31T13:58:39","guid":{"rendered":"https:\/\/www.moorethompson.co.uk\/?p=27557"},"modified":"2025-03-31T13:58:39","modified_gmt":"2025-03-31T13:58:39","slug":"what-businesses-need-to-know-about-the-changes-to-employment-allowance","status":"publish","type":"post","link":"https:\/\/www.moorethompson.co.uk\/mt-pay\/payroll-press-articles\/what-businesses-need-to-know-about-the-changes-to-employment-allowance\/","title":{"rendered":"What businesses need to know about the changes to Employment Allowance"},"content":{"rendered":"

To support employers, particularly smaller businesses, the Employment Allowance will undergo a range of modifications from 6 April 2025.<\/p>\n

Here\u2019s a quick recap of the changes.<\/p>\n

Employment Allowance will increase<\/h3>\n

The maximum annual Employment Allowance will double from \u00a35,000 to \u00a310,500.<\/p>\n

This aims to benefit smaller businesses, particularly given the increase in Employer National Insurance Contributions (NICs) set to come into force.<\/p>\n

Wider eligibility for Employment Allowance<\/h3>\n

The previous restriction, which disallowed employers with a secondary Class 1 NIC liability exceeding \u00a3100,000 from claiming the allowance, will be removed.<\/p>\n

This change opens up the Employment Allowance to all eligible businesses and charities, regardless of their NIC liabilities in the prior tax year.<\/p>\n

Rules for connected companies<\/h3>\n

Where two or more companies are connected at the beginning of the tax year, they will be treated as such for Employment Allowance purposes for the remainder of the tax year.<\/p>\n

This remains the case even if circumstances change later in the year.<\/p>\n

If your company is connected with another company, only one can qualify for the Employment Allowance for that tax year.<\/p>\n

It will be up to the companies to decide which one will claim.<\/p>\n

Two or more companies are considered \u201cconnected\u201d if either:<\/p>\n

\u00b7 One has control of the other.<\/p>\n

\u00b7 Both companies are under the control of the same person or persons \u2013 for example, companies linked in a group.<\/p>\n

The rules relating to connected companies do not apply to sole traders, partnerships or single companies.<\/p>\n

In the case of a limited liability partnership, control is determined by which company possesses, or has the rights to a share of, more than half the assets or income of the partnership.<\/p>\n

What you need to do next<\/strong><\/p>\n

If your business is a connected company, or is set to become a connected company, it is essential that you inform your accountant as soon as possible. They will be able to help you understand your entitlement to Employment Allowance and assist with arranging who will claim Employment Allowance.<\/p>\n

If you haven\u2019t been eligible for Employment Allowance before, it is worth reviewing the new criteria to see if this has changed.<\/p>\n

Employment Allowance provides vital financial support for businesses, especially those that may be feeling the effects of increased wage rates and employer NICs.<\/p>\n

For businesses already claiming Employment Allowance, enjoy the increase! Need help claiming Employment Allowance<\/strong>? Contact us today<\/a> for professional advice.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

To support employers, particularly smaller businesses, the Employment Allowance will undergo a range of modifications from 6 April 2025. Here\u2019s a quick recap of the changes. 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