Employment Allowance Question

Robster88

Hello, 

I am a co-director of a small not for profit. For the first two months, the other director was the only employee of the company. As such we did not claim employment allowance, and so paid employer National Insurance contributions. 

I have recently also become employed by the company, and so I believe are now eligible to claim employment allowance. 

When doing this months payroll (via FreeAgent) I checked the box to say that we are wanting to claim employment allowance.

The figure it says for the amount of employment allowance claimed now however is the total amount of employer’s National Insurance since the company started, including the two months where there was only one employee (and so employment allowance wasn’t claimed). 

I’m a bit confused why it’s saying that is the figure, and not just the amount of National Insurance for the month when we had two employees? 

Does anyone know why that is? 

Cheers 

[Deleted User]

From my (long distant) experience of this, one claimed  employer’s allowance for the whole tax year and so it would be applied retrospectively. 

And it appears that I was correct!

‘If your company circumstances change and more than one employee or director earns above the Secondary Threshold, you'll be eligible for Employment Allowance for the whole tax year. This includes companies where: all employees are directors where both earn above the Secondary Threshold’

https://www.gov.uk/claim-employment-allowance/when-to-claim

Robster88

Just seen your edit - I was indeed being dumb. Many thanks for quoting that - found the relevant section now which does indeed confirm it applies retrospectively in that case. 

Will keep my original reply below for posterity.. 

__________

Apologies if I’m being dumb but I can’t see anything via that link that confirms that. Whilst I can see that you can claim retrospectively, I would assume that’s for unclaimed allowance that you were entitled to claim but didn’t. 

The issue I’m having is that it’s applying the allowance to months where we weren’t eligible to claim it. 

[Deleted User]

The quotation that I used is from here: See paragraph 3 (and, indeed 4). It is correct that it is applied to the whole tax year once you become eligible, even if previously in that year you were not eligible. 

https://www.gov.uk/government/publications/employment-allowance-more-detailed-guidance/single-director-companies-and-employment-allowance-further-employer-guidance#:~:text=If%20your%20company%20circumstances%20change,earn%20above%20the%20Secondary%20Threshold


(I am not sure which half of your latest post came first, hence this reply)