Employment Allowance
How to claim
How you claim depends on whether you use your own payroll software or HMRC鈥檚 Basic PAYE tools.
If you use your own software
To claim through your payroll software, put 鈥榊es鈥� in the 鈥楨mployment Allowance indicator鈥� field next time you send an Employment Payment Summary (EPS) to HM Revenue and Customs (HMRC).
If your payroll software does not have an Employment Payment Summary field, you can use HMRC鈥檚 Basic PAYE Tools.
If you鈥檙e claiming for a previous year
If the de minimis state aid rules apply to your business, you must select the business sectors that apply to you. You must do this even if you do not make a profit.
Most businesses will need to select the 鈥業ndustrial/other鈥� category, for example a hair salon or restaurant.
If this is not true for you, select 鈥楴o鈥� in response to 鈥楧o state aid rules apply?鈥�
If you use HMRC鈥檚 Basic PAYE Tools
If you鈥檙e claiming for the current tax year
-
Select the correct name in the 鈥楨mployer鈥� menu on the home page.聽聽
-
Select 鈥楨mployment Allowance鈥�.聽
-
Check the eligibility criteria.
-
Send your EPS as normal.
If you鈥檙e claiming for a previous tax year
-
Select the correct name in the 鈥楨mployer鈥� menu on the home page.聽聽
-
Select 鈥楨mployment Allowance鈥�.聽
-
Check the eligibility criteria.
-
Answer 鈥榊es鈥� to the question 鈥楧o state aid rules apply?鈥� if de minimis state aid rules apply to you. Then select the business sectors that apply to you. Otherwise, answer 鈥楴o鈥�.聽
-
Send your EPS as normal.
Stopping your claim
If you stop being eligible, select 鈥楴o鈥� in the 鈥楨mployment Allowance indicator鈥� field in your next EPS.
Do not select 鈥楴o鈥� just because:
- you鈥檝e reached the 拢10,500 limit before the end of the tax year - this does not make you ineligible
- you鈥檙e no longer employing anyone - this allowance will stop at the end of the tax year
If you stop your claim before the end of the tax year (5 April), any allowance you鈥檝e been given that year will be removed. You鈥檒l have to pay any employers鈥� (secondary) Class 1 National Insurance due as a result.