Criteria for qualifying for employment allowance

[MarkUK]

I am getting mixed advice from 3 different people.

I am trying to determine if we qualify for employment allowance.

limited company.

2 directors

1st on £12570

2nd on dividends only (gets a salary from other employment).

My current accountant is advising 2nd director needs to earn £9100 for us to qualify.

payroll is advising £5000+

Another accountant is saying 2nd director can be paid a nominal amount before the months up to qualify (£100).

Can anyone help?

 

[Ziggy2024]

Another accountant is saying 2nd director can be paid a nominal amount before the months up to qualify (£100).

This is the correct answer from my understanding. The criteria is that the director cannot be the only employee to earn over the threshold. The threshold is £96 per week so as long as you have an employee paid this amount you are eligible for the entire year.

Can anyone help?

 

[Newchodge]

You can qualify for Employer's Allowance if you pay 1 person in addition to a director at least £96 (I tend to use £100 to make it a little less obvious). BUT you must have them on a weekly payroll as Ni thresholds are pay period specific: the monthly threshold is £417. £5,000 is the annual threshold, but you only need a payment in 1 pay period.

 

[MyAccountantOnline]

As stated here - To qualify for the Employment Allowance if your company has only one director, they must not be the only employee liable for secondary Class 1 National Insurance.

 

[MyAccountantOnline]

More relevant details here

 

[MyAccountantOnline]

You can qualify for Employer's Allowance if you pay 1 person in addition to a director at least £96 (I tend to use £100 to make it a little less obvious). BUT you must have them on a weekly payroll as Ni thresholds are pay period specific: the monthly threshold is £417. £5,000 is the annual threshold, but you only need a payment in 1 pay period.

Agreed but it does need to be genine employment. The secondary threshold is £5,000 so the OP needs to be legitimately employing someone not just putting someone on the payroll for a week to enable them to claim the Employment Allowance.

 

[Newchodge]

Agreed but it does need to be genine employment. The secondary threshold is £5,000 so the OP needs to be legitimately employing someone not just putting someone on the payroll for a week to enable them to claim the Employment Allowance.

Agreed, But they can legitimately employ them for a week to help with the year end accounts, for example. Or take someone on permanently and sack them after a week because they were no good.

 

[numbersrule]

Agreed, But they can legitimately employ them for a week to help with the year end accounts, for example. Or take someone on permanently and sack them after a week because they were no good.

Would it be claimable if the company took on a 16 year old on work experience from the local school and put them through weekly Payroll on £7.55 an hour because they were good and it had become more frequent work than ad hoc?

 

[Newchodge]

Would it be claimable if the company took on a 16 year old on work experience from the local school and put them through weekly Payroll on £7.55 an hour because they were good and it had become more frequent work than ad hoc?

If they meet the threshold.

 

[MyAccountantOnline]

Would it be claimable if the company took on a 16 year old on work experience from the local school and put them through weekly Payroll on £7.55 an hour because they were good and it had become more frequent work than ad hoc?

Depends how much they are going to be paid.

Make sure you pay them the National Minimum wage - it'll be £8 per hour for a 16 to 17 year old from April.

 

[numbersrule]

Depends how much they are going to be paid.

Make sure you pay them the National Minimum wage - it'll be £8 per hour for a 16 to 17 year old from April.

Thanks for letting me know! I wonder if the Threshold will increase as well?