April 8 2014.

Effective the 6th of April 2014, employers can claim the new Employment Allowance and reduce their employer Class 1 National Insurance contributions (NICs) by up to £2000 each tax year.

Businesses or charities can claim the Employment Allowance on employees’ or directors’ earnings by using their own 2014/15 payroll software or the HM Revenue and Customs’ (HMRC’s) Basic PAYE Tools.

The allowance is capped at £2000 per year, per PAYE scheme so, for example, if the employer Class 1 NICs are £400 each month, in April the Employment Allowance used will be £400, in May £800, and in June £1200 and so on until the maximum of £2,000 is reached.

CLICK HERE for further information on how to claim Employment Allowance.