PAYE56035 - Employer returns: NICs employment allowance: claiming the employment allowance after the start of the tax year
Although employers are encouraged to claim their Employment Allowance at the start of the tax year, they can claim part way through or even after the tax year has closed. They can claim up to four years in arrears but if they claim for previous years then they have to submit individual claims for each year, except if the claim is for the year just closed in which case they are automatically awarded the Employment Allowance for that tax year, as well as current and future tax years, provided that a claim is not already in place for the current tax year.
If a claim is made after the start of the tax year, ETMP automatically calculates the amount of Class 1 employer NICs already paid and allocates this amount, up to a maximum value of the Employment Allowance (£3000 for tax years 2016 to 2017, to 2019 to 2020. £4000 for tax years 2020 to 2021 and 2021 to 2022. £5,000 for tax years 2022 to 2023 onwards), to the employer’s record. This is utilised against the current month’s Class 1 employer and PAYE liabilities and any remaining balance is used against Class 1 employer NICs due as part of future PAYE payments.
The employer can claim repayment of the Employment Allowance from HMRC after the end of the tax year where there is a balance due. Providing there are no other PAYE liabilities to use up the Employment Allowance, then a repayment of the balance due can be made, but only for the actual Class 1 employer NICs incurred for the year up to the maximum allowance value. Where a repayment is due in these circumstances, the employer should seek repayment through the normal process.