Is employment allowance applicable if the employee is under 21?

[maz786]

As a single company director, looking to employ an 18 year old, monthly wage of £700. Would I be able to claim employment allowance, when I employ him? As under under 21 year olds don't need to pay national insurance.

 

[Newchodge]

As a single company director, looking to employ an 18 year old, monthly wage of £700. Would I be able to claim employment allowance, when I employ him? As under under 21 year olds don't need to pay national insurance.

I think not. The legislation only talks about paying ER NI contributions, but I have heard several payroll professional sate that it applies if someone earns over the threshold, even if they are exempt from ER NI.

I would suggest talking to your accountant.

 

[DWS]

Very similar question asked on Aweb recently that is worth a read, mixed answers but I came away with the opinion that EA would be available to claim.

 

[maz786]

Very similar question asked on Aweb recently that is worth a read, mixed answers but I came away with the opinion that EA would be available to claim.

Thank you. I'm not familiar with Aweb, could you please send a link.

 

[Newchodge]

The legislation states:

(1)A person qualifies for an employment allowance for a tax year if, in the tax year—

(a)the person is the secondary contributor in relation to payments of earnings to, or for the benefit of, one or more employed earners, and

(b)in consequence, the person incurs liabilities to pay secondary Class 1 contributions,

under SSCBA 1992 or SSCB(NI)A 1992 (or both).

and

(4A)A body corporate (“C”) cannot qualify for an employment allowance for a tax year if—

(a)all the payments of earnings in relation to which C is the secondary contributor in that year are paid to, or for the benefit of, the same employed earner, and

(b)when each of those payments is made, that employed earner is a director of C.]

National Insurance Contributions Act 2014

An Act to make provision in relation to national insurance contributions; and for connected purposes.

www.legislation.gov.uk

That looks pretty clear to me.

 

[DWS]

The legislation states:

(1)A person qualifies for an employment allowance for a tax year if, in the tax year—

(a)the person is the secondary contributor in relation to payments of earnings to, or for the benefit of, one or more employed earners, and

(b)in consequence, the person incurs liabilities to pay secondary Class 1 contributions,

under SSCBA 1992 or SSCB(NI)A 1992 (or both).

and

(4A)A body corporate (“C”) cannot qualify for an employment allowance for a tax year if—

(a)all the payments of earnings in relation to which C is the secondary contributor in that year are paid to, or for the benefit of, the same employed earner, and

(b)when each of those payments is made, that employed earner is a director of C.]

National Insurance Contributions Act 2014

An Act to make provision in relation to national insurance contributions; and for connected purposes.

www.legislation.gov.uk

That looks pretty clear to me.

I don’t believe it to be clear enough, You have two persons one being an under 21 year old employee and the other a Director employee, both are earning above the the secondary threshold in which case the EA should be available, just because the under 21 year old has a rate of 0% should not alter the fact that they are being charged N/I

 

[Tables Force]

www.accountingweb.co.uk/any-answers/employment-allowance-employee-under-21

Similar Q (in relation to apprentices): www.accountingweb.co.uk/any-answers/employment-allowance-does-company-qualify