Employment Allowance

Time4T_Accounts

Hi all

I’ve just become Treasurer for a (small) charity. My own background is commercial, not charity.  I have found that the charity hasn’t been claiming the Employment Allowance for NICs.   There’s no issue about entitlement to the Allowance.  

My question relates to Restricted/ Unrestricted funds : almost all of the charity’s income is Restricted- grants for specific purposes.  So ... my question here is, is the Allowance a direct refund of the employment costs that are explicitly covered by grants (ie, it has to go back into Restricted funds)? Or is it a general reduction in the charity’s operating costs (ie, can go into Unrestricted funds)?  

I’m going to claim back for previous years to the extent that I can, and, for those years, the Allowance will match the NICs paid for those years.  However, the charity is growing, and, for the current year, the NICs paid will exceed the Allowance, so the £4K ceiling will apply.  In which case, do I have to calculate which grant-funded projects are to be pro rata credited with which part of the Allowance?  Or, again, is it a case of Unrestricted funds?

Being new to the role ( just 2 months) I don’t yet have any rapport with the accounts Examiner, so I don’t yet feel confident with raising the issue in that particular quarter.  

Thoughts / guidance much appreciated.

Cheers