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2024/25 Employment Allowance is £5,000

The Employment Allowance has remained static since 2022. For the tax year 2024/25, businesses may continue to claim up to £5,000.

The rates from prior years are still applicable, as claims can be submitted up to four years after the conclusion of a tax year:

  • 2015-16: Up to £2,000

  • 2016-20: Up to £3,000

  • 2020-2022: Up to £4,000

  • April 2022 onwards: Up to £5,000

The allowance is awarded per business rather than per employee, whether a business employs one or ten employees, if their combined National Insurance Contributions (NICs) exceed £5,000, the maximum allowable claim is still only £5,000.

What happens if the allowance is not claimed?

If there is any unclaimed Employment Allowance at the end of a tax year, businesses have several options, all of which require direct contact with HMRC.

Firstly, any unclaimed allowance may be offset against outstanding tax liabilities, including VAT and Corporation Tax.

Secondly, if there are no outstanding tax liabilities, a refund may be sought. Who is eligible for the allowance?

Your business may be eligible for the allowance if:

  • It operates as a business or charity; and
  • Its Class 1 National Insurance liabilities did not exceed £100,000 in the last tax year. Who is ineligible?

Certain businesses are ineligible for the Employment Allowance:

  • Businesses where more than half of the operations are within the public sector, such as local councils and the NHS;

  • Companies that employ only one individual, who is also a director and whose earnings surpass the Class 1 National Insurance threshold;

  • Entities whose employees are not liable for Class 1 NICs on earnings below the £242 per week primary threshold.

Additionally, employees who perform personal, household, or domestic tasks are excluded from claiming the allowance, except for those employed as care or support workers.

Have a question? Please contact us or  feel free to call us on 07919221876

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