Draft legislation: Employment Allowance eligibility reforms
This technical consultation seeks views on the draft regulations and related documents that will reform the eligibility rules for the Employment Allowance by targeting it at smaller businesses.
HM Revenue and Customs (HMRC) has published a draft statutory instrument and draft statutory notice for technical consultation with a draft explanatory memorandum and draft tax information and impact note.
We welcome comments on these draft documents, which will be of most interest to employers and businesses, particularly those which are larger or that are in receipt of state aid, and especially if it is state aid provided under the de minimis rules.
The draft legislation will provide that employers with a Class 1 secondary National Insurance liability of £100,000 or more in the preceding tax year are ineligible for the Employment Allowance.
To claim the Employment Allowance, employers must have space for the full Employment Allowance (currently £3,000) within their relevant de minimis state aid threshold.
The draft statutory note sets out the information requirements for employers claiming the Employment Allowance from April 2020.
The draft tax information and impact note will help explain the potential impact of the proposals on the economy, business, individuals, and other areas.
We recommend you read the:
- draft legislation
- draft explanatory memorandum
- draft tax information and impact note
- draft statutory notice
The regulations will be made under powers in section 5 of the National Insurance Contributions Act 2014 and, as has been previously announced, a final version of the regulations and guidance will be published in October 2019.
The legislation is intended to take effect from 6 April 2020.