For Employers Claiming Employment Allowance From April 2022

14th April 2022

On 23 March the Chancellor announced that from April 2022, the Employment Allowance would increase to £5,000 per year. This change has now come into effect.

Before claiming, check you are still eligible by visiting Employment Allowance guidance. See https://www.gov.uk/claim-employment-allowance

For 2020 to 2021 tax years onwards, you can only claim the Employment Allowance if your total secondary Class 1 National Insurance contributions liability is below £100,000 in the tax year before the year of claim. You'll continue to claim the Employment Allowance through your payroll using the Employer Payment Summary. Where your payroll software has been updated, you'll automatically receive the increased allowance of up to £5,000 for 2022 to 2023. You can also claim the Employment Allowance by:

using HMRCs Basic PAYE Tools

making a payroll adjustment to reduce your secondary Class 1 National Insurance contributions to reflect the increased Employment Allowance

Alternatively, HMRC will advise you where you have an overpayment so that you can make an adjustment.