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HMRC issue EA changes reminder

Newsletter issue - March 2020.

HMRC have been reminding employers to get ready for changes to the Employment Allowance (EA) that take effect from the start of the new tax year on 1 April 2020.

Most employers with a liability to pay employer (secondary) NIC are eligible to claim the EA, including sole traders, partnerships and companies, charities and those with charitable status such as schools, academies and universities, community amateur sports clubs (CASCs), and employers of care or support workers.

The EA is delivered through standard payroll software and HMRC's real time information (RTI) system. It is not, however, given automatically and must be claimed. Claiming is very straight forward – the employer simply signifies his intention to claim by completing the 'yes/no' indicator just once. Although, ideally, the claim should be made at the start of the tax year, it can be made at any time in the year. The employer then offsets the allowance against each monthly Class 1 secondary NICs payment that is due to be made to HMRC until the allowance is fully claimed or the tax year ends.

The allowance applies per employer, regardless of how many PAYE schemes that employer chooses to operate, so each employer can only claim for one allowance. It is up to the employer which PAYE scheme to claim it against.

The 2020 Budget announced that the maximum Employment Allowance that may be claimed is increasing by £1,000 to £4,000 from April 2020. This announcement is expected to reduce around a further 65,000 businesses’ National Insurance Contributions bill to £0, and further allow small, growing enterprises to take on staff without incurring additional National Insurance Contributions liabilities. This is in addition to the 590,000 businesses whose National Insurance Contributions bill is effectively reduced to nil under the current level of the Employment Allowance (£3,000) in 2019/20).

Two changes apply to the Employment Allowance from 6 April 2020.

Class 1 NIC bill exceeding £100,000

From 6 April 2020, access to the EA is limited to businesses and charities with an employer National Insurance contributions (NICs) bill below £100,000.

In assessing whether the £100,000 limit has been reached, the total liability of all connected employers must be added together. If the total exceeds £100,000 then none of the connected employers will be eligible to claim.

Where employers become connected during the tax year causing the total collective secondary Class 1 liability to exceed £100,000 in that year, they will be eligible to continue claiming for the remainder of the tax year but will cease to be eligible from the start of the following tax year.

Where an employer becomes connected to a group of connected employers whose collective secondary Class 1 liability was in excess of £100,000 in the preceding year, the employer joining the group will no longer be eligible for Employment Allowance in the year in which they join.

State Aid

From 6 April 2020, the EA is operated as de minimis State aid. This means that employers already in receipt of State aid will need to check that they have sufficient headroom to include the EA within their relevant de minimis limit, which will be dependent upon the particular economic trade sector within which the employer operates.

If there is insufficient headroom to claim the full Allowance (even if the employer may not have used the full amount) they will not be eligible to claim. Employers will be required to make a declaration as part of the annual RTI return, confirming that this condition is met.

Addlestone Office

HMRC issue EA changes reminder

Andrew has been working in accountancy practices since leaving school at 16 and has over 30 years of experience dealing with all aspects of small and medium size businesses, personal and corporate tax issues.

He has been a partner since 1995 and has a wide and varied general practice background.

Andrew has extensive knowledge of many areas of business, accountancy and tax and is able to draw on his experience and knowledge to give clients comprehensive advice on a wide range of matters.


HMRC issue EA changes reminder

Keith joined Turner Hampton in May 2001, as tax partner. He qualified with a medium sized provincial firm in 1994 before moving to the City to join a top six firm where he specialised in multi-national partnership tax.

He has a wealth of experience in dealing with small owner managed businesses through to larger national organisations and those with interests abroad.

Keith, currently oversees the personal tax and corporation tax compliance and planning strategies of taxation for our clients.


HMRC issue EA changes reminder

Marc joined the accountancy profession in 2006 and trained with a top 50 firm before qualifying in 2010. Marc joined Turner Hampton in the same year because he was excited about the challenge of taking on a more hands-on role with clients.

Marc’s focus is on helping individuals with their businesses – from sole trades to large corporates – and guiding them through the red tape that often comes with accounting. Marc enjoys helping clients spot opportunities that can contribute to their businesses being successful, and assisting them with the real nitty-gritty, without losing the overview. Marc gets the biggest pleasure from his work when he is able to help clients save money or achieve something they may be striving towards.

Outside of work, Marc enjoys watching and playing all sports, listening to music, going to concerts and eating out.


HMRC issue EA changes reminder

Vaughn is an ACCA & AAT qualified accountant, Vaughn joined CSL in 2016 and believes his 17 years of experience has allowed him to gain a vast knowledge in dealing with all aspects of small businesses, personal tax and corporate tax issues.

Vaughn is a strong believer in building good client relationships. He feels that by understanding the specific needs of each client, he is able to offer more sound and efficient tax advice.

Outside of work Vaughn is a keen sportsman. If he isn’t enjoying time with his family, he can often be found walking many of Surrey’s local golf course fairways or attending sporting events.


HMRC issue EA changes reminder

Melanie joined CSL Partnership in April 2017 as a senior accountant. She is ACCA qualified with over 10 years experience working within practice. Melanie works with a wide range of clients and provides advice to owner-managed businesses and personal tax clients on accountancy and taxation matters.


HMRC issue EA changes reminder

Cindy joined CSL Partnership in 2007. She is an ACA qualified accountant with over 20 years of accountancy experience working within both practice and business.


HMRC issue EA changes reminder

Colin has worked in the accountancy profession for over 35 years during which he has gained a great deal of experience working on a diverse range of small and medium sized businesses along with sole trades and partnerships.

His areas of expertise lay within accounting, auditing, personal and business tax matters.

He is passionate about the role which small and medium sized businesses play in today’s market and how the accountancy profession can best serve their needs.


HMRC issue EA changes reminder

Carole has been a bookkeeper and payroll clerk for over 25 years and is qualified by experience. She has recently become involved in the process of auto enrolment for pensions. Over the years she has been self-employed but more recently employed in accountancy practices around the area.


HMRC issue EA changes reminder

Karen joined the practice in early 2019 as our Administrator/Receptionist and brings 15 years previous experience to the role. She ensures the office runs smoothly and efficiently providing back up and resources to the professional staff allowing them to focus on client matters. Karen is a very cheerful individual and always happy to help. In her spare time Karen enjoys spending time with her family.


HMRC issue EA changes reminder

Martin joined CSL Partnership in November 2019 returning to practice after spending the previous 8 years working in Industry. He is an AAT qualified accountant and has spent over 20 years working in the profession.

Martin works on all manner of clients from sole traders to large limited companies. He is an avid user of new software and technology to improve how he and clients work together and will always look to find a way to make life simpler for the client so they can focus on running the business rather than stressing over the accounts.


HMRC issue EA changes reminder

Ian joined Turner Hampton in 2016 and has worked in the accountancy profession for over 30 years.


Woking Office

HMRC issue EA changes reminder

Emma has worked in accountancy practices for over 20 years and qualified as a Chartered Certified Accountant in 2000. She has gained experience in all aspects of the accounting and auditing functions, developing exposure to a broad range of clients.

Emma advises owner-managed businesses and personal tax clients on accountancy and taxation matters. She has a particular expertise on systems review and implementation.

She has worked for CSL Partnership since it formed in 2001, becoming a director in 2005 and now manages the Woking office.


HMRC issue EA changes reminder

Philip has worked in various accountancy practices since the age of 19 and joined CSL Partnership in 1998 where he qualified in 2008.

He works with individuals, sole traders and limited company businesses to assist them with all their accounting and taxation requirements.


HMRC issue EA changes reminder

Andy has worked in accountancy since 2010 and joined CSL Partnership in April 2018. He has experience in a wide range of sectors, and has enjoyed working with individuals, sole traders and limited companies of varying sizes and needs. Outside of the office, you’ll find Andy on a hockey pitch or listening to music.


HMRC issue EA changes reminder

Lesley joined Turner Hampton in 2003, having previously worked both in accounts departments and in practice. She has been running client payrolls since joining the company and has gained many years of experience in payroll. Lesley now processes all aspects of payroll for both Turner Hampton and CSL Partnership clients.


HMRC issue EA changes reminder

Gail joined the firm in May 2018 and has worked in accountancy practices as a bookkeeper and payroll clerk since 2013. Historically, Gail has been self-employed and worked for companies in the financial and customer service sectors.

She is a full member of AAT. When not working, she enjoys hiking, mountain biking and yoga.


HMRC issue EA changes reminder

Marrieclaire is a bookkeeper, she processes payroll and maintains the accounting records to prepare VAT Returns and CIS Returns. Marrieclaire is a qualified Chartered Management Accountant with varied industry experience.


HMRC issue EA changes reminder

Elaine joined in June 2017. Prior to this she worked in a number of different industries including fast moving consumer goods and mechanical & electrical consultants.

She is a fellow member of AAT having completed the qualification in 1997.


HMRC issue EA changes reminder

Natasha joined CSL Partnership in October 2019, having worked in accountancy since 2017. Natasha has experience completing payrolls, bookkeeping, VAT returns & CIS returns. She is currently a trainee accountant, looking to become qualified in the coming years.


HMRC issue EA changes reminder

Wendy joined CSL in April 2019 as a Part-Time receptionist and administrator after 25 years working as an office manager in the design world. She is more than happy meeting and greeting clients and working with such a great team of people in the Woking Office. In her spare time Wendy enjoys tennis, yoga and pilates.


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