Print

Employers claiming the Employment Allowance may have received double relief if also claiming Coronavirus Job Retention Scheme (CJRS) payments due to the pandemic. The ICAEW Tax Faculty has consulted with HMRC to provide clarification.

The Employment Allowance (EA) provides relief against employer's Class 1 National Insurance Contributions (NICs) up to £4,000. Businesses with less than £100,000 of employer's Class 1 NICs in the previous tax year are eligible.

CJRS claims paid for the period from March 2020 to July 2020 included an amount to cover the employer's Class 1 NICs. 

If a business deferred the EA claim until after running the July payroll, HMRC do not believe that there's any danger of double claiming, provided:

If a business had claimed EA at the start of 2020/21:

Useful guides on this topic

Employment Allowance
The Employers' National Insurance Contributions (NICs) allowance is an allowance given to small and medium-sized employers to offset against their annual Employers' National Insurance liabilities.

National Insurance: Rates  
Employee/Employer and Self-employed rates tables.

Covid-19: Coronavirus Job Retention Scheme (CJRS) to 31 October 2020
Coronavirus Job Retention Scheme (CJRS): a cash grant payable to employers up to 31 March 2021. This guide covers the scheme which ended on 31 October 2020.

Covid-19
COVID-19 zone: all about tax and financial support during the crisis

External links

HMRC clarifies interaction between EA ad NIC element of CJRS grants


Small acorn
If you like our content come and join us.

Thousands of accountants and advisers and their clients use www.rossmartin.co.uk as their primary TAX resource.

Register with us now to receive our unique FREE Tax Planning Tips and Advice Guide & our FREE OMB Newsletter.