With the increase in employers National Insurance to 15% and the increased Employment Allowance to £10,500 alongside the removal of the employers £100,000 test, employers will be looking to see how they can reduce their secondary NI liabilities and qualify for the Employment Allowance.
The number of enquiries of how to claim especially for multiple businesses which may have common owners or connections has already commenced.
Of course, claiming an allowance when not qualified can be an expensive experience.
Following the Autumn Budget 2024 announcements, the Guidelines for Compliance (GfC) team of HM Revenue and Customs (HMRC) has published Help with the Apprenticeship Levy and Employment Allowance — connected entities — GfC10.
This guidance clarify the connected entities rules to help employers correctly report the Apprenticeship Levy and claim Employment Allowance. The term ‘entity’ includes companies, charities, and public bodies (and their related organisations).
These guidelines:
- explain how the connected entities rules impact the Apprenticeship Levy and Employment Allowance
- highlight the common errors employers make
- give practical advice on how to identify connected entities
- provide help on the unique scenarios in the public body population
- set out how employers can correct any errors made
Connected company rules
Companies connected for the purposes of Employment Allowance are also connected for the purposes of the Apprenticeship Levy (and vice versa).
Two companies are ‘connected’ with each other if one of the following occurs:
- one of them has control of the other
- both are under the control of the same person or persons
The guidelines are a practical product to refer to and should be read alongside HMRC’s existing guidance. They will be updated as necessary to maintain their relevance and usefulness.
PAYadvice.UK 19/11/2024