ALM14000 - Cessation and liquidation

Where an employer ceases to be an employer or goes into liquidation during the tax year, they can still offset the full £15,000 allowance against their levy liability for the part of the tax year that they were an employer.

Example

Company G stops trading in December. It is not connected to any other company. It has been reporting and paying the levy since the start of the tax year. Even though Company G does not trade for the full tax year, it is still entitled to the full annual levy allowance of £15,000. In November (the month before Company G cease to trade), Company G’s pro-rated cumulative levy allowance will be £10,000 (8 x £1,250). However, because Company G ceases to trade in December, levy allowance for December will be £15,000 (minus £10,000 already claimed), not £11,250 (9 x £1,250).