Member Article

Waltons Clark Whitehill urges employers to act on employment allowance

Waltons Clark Whitehill, the Tees Valley firm of accountants and business planners, is advising business owners to take advantage of a tax break from HMRC, in light of significant payroll changes.

The Government’s new Employment Allowance, which came into effect on April 6, will see them pay the first £2,000 of employer’s National Insurance contributions (NICs), with thousands of businesses and charities throughout the country not having to make any NICs at all.

George Hardey, Senior Tax Manager at Waltons Clark Whitehill, is encouraging small businesses to claim the money, if they are entitled to it, which will be deducted from their monthly liability.

He said: “The majority of businesses can benefit from this initiative, although there are one or two exceptions for employers that pay someone for household work, public authorities or connected businesses.

“It has been introduced to encourage businesses to increase the number of employees, and is relatively straightforward to claim. Businesses should simply notify HMRC when submitting their Employer Payment Summary via RTI and then deduct the allowance from their employers’ NIC when paying HMRC.

“Using the allowance also creates an opportunity for some bosses in owner managed businesses to take a higher salary and save tax, which frankly doesn’t come along often and should be taken.”

Unfortunately it’s not all good news for employers as the government has stopped funding Statutory Sick Pay (SSP) leaving employers to cover the costs themselves.

George Hardey added: “Small businesses are really going to feel this change. Most already struggle when an employee is ill, coping with the loss of manpower and drop in income. Having to cover the full cost of SSP is another expense that they don’t need.”

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This was posted in Bdaily's Members' News section by George Hardey .