The Employer’s £2,000 NIC Allowance

This is due to start on 6Th April 2014 for all businesses, charities and CASCs, as an offset against Class 1 secondary contributions.

HMRC have announced the following:

  1. The allowance will be obtained via standard payroll software and HMRC’s RTI system.
  2. A facility will be added to the RTI Employer Payment Summary referring to the allowance in the form of a “yes/no” indicator, with payroll software providers doing the same.
  3. HMRC will amend its basic PAYE tools to have an EPS facility to help those employers who do not have such facility on their software.
  4. Employers signify their intention to claim by completing the “yes/no” indicator just once.
  5. The employer then offsets the allowance against each monthly Class 1 secondary NICs payment until fully claimed or the tax year ends. For the following tax year the allowance is available against NICs as the liability arises during the year.
  6. The allowance is per employer, regardless of how many PAYE schemes are operated by the employer who can choose which scheme to claim against it.

The exact mechanics of the scheme are yet to be confirmed by HMRC but the £2000 saving in national insurance will be gratefully received by us and our cients.

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