{"id":226466,"date":"2025-05-06T09:27:12","date_gmt":"2025-05-06T09:27:12","guid":{"rendered":"https:\/\/peraltafinancing.com\/accounting\/employment-allowance-iris-kashflow\/"},"modified":"2025-05-06T09:27:12","modified_gmt":"2025-05-06T09:27:12","slug":"employment-allowance-iris-kashflow","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=226466","title":{"rendered":"Employment Allowance &#8211; IRIS KashFlow"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div>\n<p>Employment allowance grants employers up to \u00a33,000 per year off their secondary Class 1 National Insurance bill.<\/p>\n<p>The allowance is taken off your National Insurance Contributions (NICs) until the \u00a33,000 has gone or the tax year ends \u2013 whichever comes first.<\/p>\n<h2>Can I claim Employment Allowance?<\/h2>\n<p>Most businesses and charities, including community amateur sports clubs, can claim employer allowance when paying Class 1 National Insurance. Care and support workers are also eligible.<\/p>\n<p>You won\u2019t be able to claim if:<\/p>\n<ul>\n<li>You\u2019re the director and only employee paid above the Secondary Threshold.<\/li>\n<li>You employ someone for personal, household or domestic work unless they\u2019re a carer or support worker as mentioned above.<\/li>\n<li>Your business does more than half of your work in the public sector (unless you\u2019re a charity).<\/li>\n<li>You\u2019re a service company and work under <a href=\"https:\/\/www.gov.uk\/guidance\/ir35-what-to-do-if-it-applies\" target=\"_blank\" rel=\"noopener\">IR35 rules<\/a>, and the earnings of the intermediary are your only source of income.<\/li>\n<\/ul>\n<p>There are also restrictions if you have more than one employer PAYE reference. In this instance, you can only claim employment allowance against one PAYE reference.<\/p>\n<p>Similarly, only one company or charity can claim employment allowance if they are part of a group.<\/p>\n<p>In both of these cases, it\u2019s best that you choose a business or PAYE scheme that\u2019s likely to use up most (or all) of the allowance.<\/p>\n<h2>How to claim employment allowance<\/h2>\n<p>You can only claim the allowance against Class 1 National Insurance. You can claim up to \u00a33,000 each tax year, though you can still get this employer\u2019s allowance even if you pay less than \u00a33,000 per year.<\/p>\n<p>You can claim employment allowance at any point in the tax year. To claim Employment Allowance, you\u2019ll simply have to tick \u201cYes\u201d in the \u201cEmployment Allowance Indicator\u201d field in KashFlow next time you send an Employment Payment Summary (EPS) form to HMRC.<\/p>\n<p>You can start claiming at any point in the year. If you claim employment allowance late in the tax year, you can:<\/p>\n<ul>\n<li>Use it against the Class 1 National Insurance you\u2019ve paid.<\/li>\n<li>Use any unclaimed allowance to pay tax or NICs owed at the end of the year (if you don\u2019t owe anything on PAYE, you can use it on <a href=\"https:\/\/www.kashflow.com\/resources\/resource-9-ultimate-guide-to-vat\/\">VAT<\/a> or Corporation Tax).<\/li>\n<li>Get a refund after the end of the year if you don\u2019t owe anything.<\/li>\n<\/ul>\n<h2>Claim employment allowance from previous years<\/h2>\n<p>You can claim an allowance of \u00a32,000 for a previous tax year, up to 4 years after the end of that tax year. To do this, you have to submit a separate EPS for each year you wish to claim back. This EPS won\u2019t need to include any EPS figures you\u2019ve previously reported.<\/p>\n<h2>Stopping your employment allowance claim<\/h2>\n<p>If you\u2019re no longer entitled to employment allowance, just tick \u201cNo\u201d in the \u201cEmployment Allowance Indicator\u201d field of your next EPS.<\/p>\n<p>You don\u2019t need to do this if you reach the \u00a33,000 limit before the tax year ends.<\/p>\n<p>If you stop employing people, then just wait until the next tax year before selecting no.<\/p>\n<h2>Claimed employment allowance in error<\/h2>\n<p>If you\u2019ve claimed employment allowance in error, then your employer NICs may be wrongly offset by the allowance. If this is the case, then you\u2019ll have to repay the allowance you wrongly claimed.<\/p>\n<p>If you\u2019re unsure of whether you need to repay, you can call HM Revenue and Customs on 0300 200 3500.<\/p>\n<h2>Employer allowance record keeping<\/h2>\n<p>As with most financial documents, you\u2019re legally obliged to keep any records for at least 3 years after the end of the related tax year.<\/p>\n<p>Records relating to your allowance claim need to show:<\/p>\n<ul>\n<li>Why you were entitled to it<\/li>\n<li>How much was used or repaid<\/li>\n<li>What liabilities your allowance covered<\/li>\n<\/ul>\n<h2>Claiming employment allowance in KashFlow<\/h2>\n<p>If you\u2019re eligible, then you can check that you are claiming Employment Allowance, go to\u00a0<strong>Company, Setup Details, Government<\/strong>\u00a0and ensure the Employment Allowance box is selected. If this is not the case, then you may receive an underpayment notification from HMRC.<\/p>\n<p><strong>For a pressure-free PAYE system, take a look at <a href=\"https:\/\/www.kashflow.com\/payroll\/\" target=\"_blank\" rel=\"noopener\">KashFlow Payroll Software<\/a> \u2013 which streamlines and simplifies all payroll for small businesses. <a href=\"https:\/\/www.kashflow.com\/try-payroll\/\" target=\"_blank\" rel=\"noopener\">Start a free trial<\/a> or <a href=\"https:\/\/www.kashflow.com\/payroll\/kashflow-payroll-demo\/\" target=\"_blank\" rel=\"noopener\">book a demo<\/a> to see how it works.<\/strong><\/p>\n<p><a href=\"https:\/\/www.kashflow.com\/resources\/resource-9-ultimate-guide-to-vat\/\"><img fetchpriority=\"high\" decoding=\"async\" width=\"721\" height=\"668\" class=\"alignnone cta-image wp-image-79515\" src=\"https:\/\/www.kashflow.com\/wp-content\/uploads\/2017\/10\/cro-wk-3-cta-pink.png\" alt=\"\"\/><\/a><\/p>\n<\/p><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Employment allowance grants employers up to \u00a33,000 per year off their secondary Class 1 National Insurance bill. The allowance is taken off your National Insurance Contributions (NICs) until the \u00a33,000 has gone or the tax year ends \u2013 whichever comes first. Can I claim Employment Allowance? Most businesses and charities, including community amateur sports clubs, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":226467,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11759],"tags":[32055,18224,4193,17925],"dealstore":[],"offerexpiration":[],"class_list":["post-226466","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting","tag-allowance","tag-employment","tag-iris","tag-kashflow"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Employment Allowance - IRIS KashFlow - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=226466\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Employment Allowance - IRIS KashFlow - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"Employment allowance grants employers up to \u00a33,000 per year off their secondary Class 1 National Insurance bill. The allowance is taken off your National Insurance Contributions (NICs) until the \u00a33,000 has gone or the tax year ends \u2013 whichever comes first. Can I claim Employment Allowance? 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