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Employment Allowance Update

November 2014

You may have recently seen a television advert run by HMRC promoting employment allowance. Employment allowance is legislation that allows businesses to claim, as of April 6th 2014, up to £2,000 a year in class 1 national insurance contributions. If your class 1 NIC contributions are less than £2,000 you will not have to pay anything.

It is estimated that over 1 million businesses and charities will benefit, with around 450,000 not having to pay any contributions at all.



Businesses Domestic employer who employs for personal use i.e. gardener
Charities Public body I.e. local council
Community Amateur Sports Club Service company with only deemed payments of employment income


The change will encourage businesses to grow and employ more staff, making it cheaper and easier to do so. The government have also abolished national insurance contributions for under 21 year olds on earnings up to £813 a week.

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