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Level 1

New 2020/2021 Employment Allowance along with Job Retention Scheme

Hi

I am using QBO.

The new Employment Allowance is due for 2020/2021, I wondered how this will work alongside the Governments Job Retention Scheme?  If we benefit from the allowance according to QB calculations then I can see people also claiming the full amount through the Job Retention Scheme Portal that they are working on releasing.  Meaning that Employers would benefit twice!  

2 REPLIES 2
QuickBooks Team

New 2020/2021 Employment Allowance along with Job Retention Scheme

Hi sarahgress01,

 

Let me provide you some information about New 2020/2021 Employment Allowance.

 

The Employment Allowance has slight changes to the criteria which impact your business eligibility. For those companies who are able to claim the allowance tax year. they must have an Employers’ NIC liability less or equal than £100,000 in the previous tax year.

 

Also, HMRC now requires you to include your industry type, which can be found in payroll settings. For them to calculate your tax liability to know whether you qualify or not, please check this article: Set Up Employment Allowance in QuickBooks Online Payroll.

 

Here's an article that will give more information about changes: Changes To Employment Allowance in 2020/21.

 

Fill me in if there's anything else you need help with. I'll make sure to get back.

Level 6

New 2020/2021 Employment Allowance along with Job Retention Scheme


@sarahgress01 wrote:

Hi

I am using QBO.

The new Employment Allowance is due for 2020/2021, I wondered how this will work alongside the Governments Job Retention Scheme?  If we benefit from the allowance according to QB calculations then I can see people also claiming the full amount through the Job Retention Scheme Portal that they are working on releasing.  Meaning that Employers would benefit twice!  


This is an old post but an interesting point - and it seems that HMRC had the same thought @sarahgress01 

It's quite badly worded but HMRC's guidance now states that grant for Employer's NIC should not be claimed if none is due - essentially, that EA should be taken off any claim before submitting.

(it also makes clear that employer's should not be claiming NIC grant for employees who they would not normally be paying NIC for - i.e. NIC Codes H,M,Z).

 

It does lead to other questions though.

(1)  if your CJRS claim includes amounts from March (month 12 of 2019-20) & your EA from 19-20 has been used up, you can claim for employer's NIC for this - but maybe not for April (month 1 of 20-21).

(2)  a larger employer would probably exhaust the EA in Month 1 - can they hold off making a claim till May & thereby have the double benefit?