An employer gets £3,000 off their Class 1A (Secondary) National Insurance in each tax year.
The question arises – can two or more companies in a group claim £3,000 each.
The answer is No, only one of the group companies can claim employment allowance. Tax payer decides which company gets it.
I would highly recommend a read through the technical guidance link given below:
a) HMRC even includes unincorporated businesses in connected businesses.
b) Besides share-holding and control as under Corporation Tax Act 2010, HMRC has included within connected businesses – economically interdependent businesses as well.
Technical guidance in this case is highly readable with lots of examples.
PS – I came across this little gem of information among audience questions today on HMRC Webinar: Employers – what’s new for 2018. I will highly recommend subscribing to these webinars. They are free !
HMRC’s latest Agent Update Issue 74 informs that from 6 April 2020 Employment Allowance will be restricted to employers with NICs liabilities of under £100,000.
That is employers will need to look at their last tax year’s Employer NIC expense and if its over £100k they cannot claim £3k Employment Allowance.
If employer is part of a group Class 1 NICs liabilities of all companies, and/or PAYE schemes, needs to be added together to assess eligibility for Employment Allowance.