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Firms could be leaving more than £10,000 on the table by not actively claiming what they’re entitled to
Larger businesses across the North East could be missing out on thousands of pounds annually by not claiming their national insurance (NI) allowances, a senior payroll professional has warned.
Julie Gunnell, Associate Director of Payroll Growth at UK top 10 accountancy and business advisory Azets, who covers the North East, said firms could be missing out on the opportunity to reduce their Class 1 NI payments by not claiming their Employment Allowance.
The allowance enables businesses and public bodies who do less than half their work in the public sector to reduce their annual NI liability by up to £10,500 each year.
From April this year employers with more than £100,000 in NI liabilities became eligible for the Employment Allowance – but they must actively claim it.
Julie said: “This allowance has become even more valuable since employer NI rates were increased to 15% and the cap preventing employers with over £100,000 in NI liabilities from claiming was removed – but businesses can’t benefit from it if they don’t take action. Firms here in the North East could be leaving more than £10,000 on the table by not actively claiming what they’re entitled to.
“The halfway point of the financial year is a good time for employers to check they’re making use of the Employment Allowance and I advise every business to check they’re eligible and check they’re claiming if they’re entitled to do so.”
James Dawson, Accountancy and Business Advisory Services (ABAS) Partner at Azets, added: “We are seeing many of our larger clients miss making a claim for this relief, which is worth £10,500 to them and provides a welcome offset to help with rising operational costs.
“Perhaps with the announcement being made in October 2024, in advance of the change for this 2025-26 tax year, together with the fact larger employers have always been ineligible due to the NIC liability cap, it isn’t surprising that many firms have just simply overlooked it.”
The Employment Allowance can be claimed through payroll software or via HMRC. However, eligibility rules still apply, particularly for businesses with connected companies.
Under HMRC’s guidance, only one company within a group of connected companies can claim the allowance. This applies even if the companies cease to be connected during the tax year.
Julie said: “We often see businesses make the mistake of assuming each company can claim independently. It’s vital to understand the connected company rules and coordinate internally, so only one entity makes a claim and other companies in the group aren’t at risk of making errors or incurring unnecessary penalties.”
Azets’ regional offices are in Durham, Newcastle and Wynard.
