Employment allowance and National insurance questions Paye tools.

anotherquestion

Hi folks,
We use Basic Paye tools and employ someone to help care for our disabled child for a few hours each week (Direct Payments care scheme)
We usually get the employer allowance, my vague understanding is, this reduces and gives us a threshold under £3k for year 19-20 of no employer NI insurance to pay.
I have just activated year 20-21 on Paye tools and have ticked what I think is the correct boxes, giving me the following readout,
.......................................................................................................

Exempt from employer Class 1 National Insurance contributions:

No
....................................................................................................

Employment Allowance for 2020-21

Are you eligible and wish to claim Employment Allowance for this tax year?

Yes

Do de minimis State aid rules apply?

No
...............................................................................................
Our employee usually earns no more than £160-240 in any given month before tax.
Does the above seem correct that I have in the Paye tools.
Many thanks for any assistance.

oldbikebloke

anotherquestion said:

Hi folks,
We use Basic Paye tools and employ someone to help care for our disabled child for a few hours each week (Direct Payments care scheme)
We usually get the employer allowance, my vague understanding is, this reduces and gives us a threshold under £3k for year 19-20 of no employer NI insurance to pay.
I have just activated year 20-21 on Paye tools and have ticked what I think is the correct boxes, giving me the following readout,

Exempt from employer Class 1 National Insurance contributions: No

Employment Allowance for 2020-21 Are you eligible and wish to claim Employment Allowance for this tax year? Yes

Do de minimis State aid rules apply? No

Does the above seem correct that I have in the Paye tools.

Yes, you have correctly followed the instructions as shown in PAYE Basic 
- you are not an overseas employer so no, you are not exempt;
- yes you are eligible (your pay bill is somewhat below £100,000)
and
- no to state aid since it categorically states answer no if you employ a carer since your activity as an employer is not that of a commercial operation in existence to make profits. State aid question is an EC legacy issue looking to prevent a commercial operation getting an advantage over its competitors in other EC countries from "unequal" aid in the form of tax rebates such as the employer allowance - a "policy" that will disappear once we finish "transition" and do actually Brexit

have you checked whether your employee has an updated tax code? How do you, as employer communicate with HMRC?
a) they send you snail mail (check if you have received a paper P6 coding notice and/or ask the employee as they should have received a copy themselves)
or
b) do you use the employer online system (in which case check the messages screen for a P6 or P9 notice)
https://www.gov.uk/paye-online

and as for the question re the submission you were originally also asking about, yes, you submit that (ideally) before you run the April payroll so the system records you are claiming employment allowance when processing the payroll

anotherquestion

Thank you very much for your in-depth reply, I will check with our employee as to whether they have got an updated tax code, though I do know she is in the same job.
Direct payments are suspended for the moment anyways due to the virus scare.
Thank you once again.