Employment Allowance
How to claim
How you claim depends on whether you use your own payroll software or HMRC鈥檚 Basic PAYE tools.
If you use your own software
To claim through your payroll software, put 鈥榊es鈥� in the 鈥楨mployment Allowance indicator鈥� field next time you send an Employment Payment Summary (EPS) to HM Revenue and Customs (HMRC).
If your payroll software does not have an Employment Payment Summary field, you can use HMRC鈥檚 Basic PAYE Tools.
If the de minimis state aid rules apply to your business
If the de minimis state aid rules apply to your business, you must select the business sectors that apply to you, even if you do not make a profit.
Most businesses will need to select the 鈥業ndustrial/other鈥� category, for example a hair salon or restaurant.
If this is not true for you, choose 鈥楽tate aid rules do not apply鈥�.
If you use HMRC鈥檚 Basic PAYE Tools
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Select the correct name in the 鈥楨mployer鈥� menu on the home page.
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Select 鈥楥hange employer details鈥�.
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Select 鈥榊es鈥� in the 鈥楨mployment Allowance indicator鈥� field.
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Answer 鈥榊es鈥� to the 鈥楧o state aid rules apply?鈥� question if de minimis state aid rules apply to you. Then select the business sectors that apply to you. Otherwise, answer 鈥楴o鈥� and select 鈥楽tate aid rules do not apply鈥�.
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Send your EPS as normal.
If you make off-payroll payments
If you鈥檙e eligible for Employment Allowance but your claim is rejected, you鈥檒l need to call HMRC鈥檚 Employer Helpline.
Stopping your claim
If you stop being eligible, select 鈥楴o鈥� in the 鈥楨mployment Allowance indicator鈥� field in your next EPS.
Do not select 鈥楴o鈥� just because:
- you鈥檝e reached the 拢5,000 limit before the end of the tax year - this does not make you ineligible
- you鈥檙e no longer employing anyone - this allowance will stop at the end of the tax year
If you stop your claim before the end of the tax year (5 April), any allowance you鈥檝e been given that year will be removed. You鈥檒l have to pay any employers鈥� (secondary) Class 1 National Insurance due as a result.