Have you claimed your Employment Allowance yet?

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Don’t lose out, do it today.

The Employment Allowance offers businesses and charities a reduction of up to £2,000 in the amount of employer Class 1 National Insurance contributions (NICs) they have to pay every year.

You can claim the Employment Allowance after the start of the tax year as long as your business or charity has employer Class 1 NICs liabilities and is eligible to claim the Employment Allowance. For example, if you make your claim in October, your Employment Allowance deduction against your year to date Class 1 NICs liability will be your employer Class 1 NICs liability to date (up to the £2,000 annual maximum) as shown on your last Full Payment Submission.

If you haven’t made a claim for the Employment Allowance you will shortly receive an electronic Generic Notification Service (GNS) message from HMRC encouraging you to check eligibility and claim.

It is important to remember, the Employment Allowance can only be claimed once for each employer and not for each PAYE scheme. So even if you receive a reminder to claim the Employment Allowance, you must ensure you are only claiming once against one PAYE scheme, especially if the business runs multiple schemes. The Employment Allowance can only be claimed once for each employer or group of employers.

Shared Parental Leave

The Government is reforming the statutory pay and leave entitlements available to employed parents. For babies due or adopted children matched or placed on or after 5 April 2015 a new entitlement of Shared Parental Pay and Leave (ShPP/SPL) will replace Additional Statutory Paternity Pay and Leave (ASPP/APL). The parents of babies due or adopted children matched on or before 4 April 2015 will continue to be eligible for ASPP or APL.

ShPP/SPL gives families greater choice over how they arrange childcare in the first year by allowing working mothers the option to end their maternity pay and leave early and to share untaken leave and pay with their partner. An adopter will similarly be able to bring their adoption leave and pay to an early end to opt into ShPP and SPL.

It is intended to enable parents to take a greater role in caring for a child, and to help both parents to better balance childcare responsibilities with staying in work. For businesses, this helps them keep their best talent and allows employers to recruit with confidence that their employees will be less likely to drop out of the workforce when they have children.

Current entitlement to 52 weeks statutory maternity/adoption leave, 39 of which is paid, and two weeks of statutory paternity leave and pay is all unchanged. However, the first six weeks of Statutory Adoption Pay will increase to 90% of average weekly earnings to bring it in line with Statutory Maternity Pay.

How does it work?

Working parents of a baby due or an adoptive child placed on or after 5 April 2015 may be eligible for SPL and ShPP. Under SPL and ShPP, mothers/adopters will be able to choose to end their maternity/adoption leave and pay early (at any point from two weeks after the birth/placement) and share their untaken pay and leave with their partner. Shared parental leave and pay can be stopped and started and parents can be off at the same time, if they wish.

Parents will be able to take their leave in phases, for example 20 weeks for the mother/adopter, followed by 20 weeks for the father/partner, followed by 10 weeks for the mother/adopter. So it may be the case that statutory parental pay is paid over one or two discontinuous periods. Parents must notify their employers of their plans under SPL 8 weeks before they become eligible for it, and all shared leave and pay must be taken between the birth/placement and the child’s first birthday.

What do employers need to do?

The first notifications of intention to take SPL are expected to arrive with employers from February 2015. The Government will provide an example form for parents to use. Some employers may wish to create their own requirements for how their employees notify them.

Employers will need to update payroll systems where relevant to accommodate providing ShPP to employees taking SPL, and to enable these payments to be paid discontinuously where necessary.

The Government will provide online tools to check eligibility, and publish detailed guidance on the rules around SPL and ShPP. A key part of SPL is the discussion between employer and employee to agree the phasing of SPL and the return to work, and ACAS will also publish guidance to support this process.

PAYE for Employees – a new digital service

PAYE for Employees is a new online service for individuals who fall within the PAYE system and will become available from the end of September 2014. It will allow employees to view, add and amend their company car and car fuel details online.

What does the new service offer?

Employees have previously been able to tell HMRC about any changes to their circumstances, including changes to their benefits in kind, by phoning or writing to HMRC.

PAYE for Employees will allow customers to view and make changes that will alter their tax code online for the first time, starting with a limited range of benefits in kind. During 2014 additional functionality will be added to let customers report other changes affecting their tax code.

As an employer this should mean you get fewer queries from your employees as their tax codes will be more accurate and up to date.

Tax Agents will be able to use the service on behalf of their clients later in the year.

If you have any queries please contact Helen Miller / Maureen Owens, Payroll or Sue Stephens, Personal Tax Consultant.