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Employment Allowance and the Coronavirus Job Retention Scheme (CJRS)

Employment Allowance and the Coronavirus Job Retention Scheme (CJRS)

April Foster

There has been considerable discussion about the Employment Allowance and how it interacts with CJRS.

Clarity and further guidance has now been provided by HMRC confirming that employers can save their Employment Allowance (£4,000 for 2020/21 for those Employers who qualify) for later and use it after the CJRS grant has ceased to be available. 

It has always been clear that if the Employment Allowance covers all of the employer’s secondary class 1 NIC liability for the year, so that no secondary class 1 NIC is due for the year, then the employer should not claim for any employer’s NIC under the CJRS.

Where there has been confusion is what happens where the Employment Allowance does not cover all of the employer’s secondary class 1 NIC liability for the year. It has now been confirmed that the employer is allowed to wait and claim the Employment Allowance later in the year. There should be no worry about claiming relief for the same employer’s NIC twice, provided that for the time after the date when the Employment Allowance claim is made there is at least £4,000 of secondary class 1 NIC payable. It is very important to make sure the Employment Allowance is not set against Employer’s NIC that has been claimed under the CJRS. 

It is allowable for employers to claim the Employment Allowance (late) for liabilities which are under £4,000. However, they will need to take additional care to ensure that they do not receive relief for the same NIC liabilities twice.

Where Moore East Midlands have prepared or assisted you in making your furlough claims, we will be reviewing all claims on a client by client basis to ensure that the claim for Employment Allowance and claim for employers’ NIC under CJRS is maximised.

If you receive any correspondence from HMRC regarding this, please forward to us immediately for consideration and advice.

If you have prepared your furlough claims yourselves and you require assistance in this complex area, please contact your usual Moore adviser or a member of our furlough service team.