Employment Allowance increases from April 2020

With the budget announced on Wednesday, we’ve all had time to consider how our businesses will be affected by the changes put in place. One of these will be the increase in employment allowance from April 2020.

The employment allowance was introduced back in 2014 and was first introduced as relief of up to £2,000 and increased to £3,000 in 2015.

The new chancellor, Rishi Sunak, announced that from 6 April 2020, you could get up to £4,000 a year off your national insurance bill. That’s an increase in the previous allowance of £3,000 which will mean an extra £1,000 for you the employer.

The objective behind this new policy is to support businesses by providing relief of up to £4,000 on their secondary Class 1 National Insurance Contributions liabilities. This could reduce around 65,000 businesses’ National Insurance Contributions bill to £0 and allow growing enterprises to take on staff without incurring additional contributions liabilities.

The good news is, employers will not have to do anything extra to claim the additional allowance and businesses and charitable organisations who already claim the allowance through their payroll software will automatically receive the increased allowance.

Paul Beare Ltd can answer any questions around this new policy and with any changes to your payroll. Simply contact us today to find out more.