skip to navigationskip to main content

Employment Allowance consultation launched

Newsletter issue - December 2016.

HMRC have launched a technical consultation on proposals to restrict the Employment Allowance (EA) from employers of 'illegal workers'. The consultation is open for comments until 3 January 2017.

Budget 2016 announced that from April 2018, the EA would be removed for one year from those who receive civil penalties for employing illegal workers. Broadly, the allowance entitles the vast majority of businesses, charities, and community amateur sports clubs to a reduction of up to £3,000 per year on their employer National Insurance Contributions (NICs) bill. Whilst the allowance has very broad eligibility, the Government believes that those who break the law by employing illegal workers should not benefit from it. The purpose of the restriction therefore is to ensure the allowance focuses on employers who are providing legitimate employment.

The proposed change will only impact employers who have received a civil penalty from the Home Office for employing workers subject to immigration control and have exhausted their Home Office appeal rights in relation to that civil penalty. Early estimates suggest that around 2,000 employers will be affected.

Subscribe to our newsletter

Our monthly newsletter contains a round up of the latest tax news and updates of what's happening at Killicks Ltd

As a subscriber you will automatically receive our newsletter direct to your inbox

Please read our Privacy Policy before signing up

Accredited training providers for:

icon_white_sage
icon_white_kashflow
icon_white_freeagent
icon_white_quickbooks