HMRC’s Software Developer Support Team (SDST) has circulated a message that highlights that a number of businesses are incorrectly selecting ‘State aid rules do not apply to employer’ on their Employer Payment Summary (EPS), when claiming the Employment Allowance. The rules surrounding eligibility for the Employment Allowance changed for tax year 2020-21, and now only employers with employers’ Class 1 National Insurance liabilities of less than £100,000 in the preceding tax year can claim it. Due to this change, the Employment Allowance has been reclassified as de minimis State aid, and employers must ensure that, by receiving the Employment Allowance, they don’t exceed the relevant ceiling for their sector. De minimis State aid rules only apply where a business engages in economic activity. The latest edition of the Employer Bulletin explains when a business sector should be chosen, and in which scenarios ‘State aid rules do not apply to employer’ should be selected. If an EPS has already been submitted which displays incorrect details, this can be rectified by sending another EPS. When claiming the Employment Allowance, employers must provide their business sector on their EPS if the company engages in economic activity. The business sectors are Agriculture, Aquaculture & Fisheries, Road Freight Transport and Industrial / Other for everything else. Industrial / Other should be selected where the business undertakes economic activity but not within Agriculture, Aquaculture & Fisheries or Road Freight Transport. Examples given in the Bulletin are that of hair salons and restaurants. De minimis State aid rules will apply where a business is engaged in economic activity, so any business that provides goods or services to the market. The ‘State aid rules do not apply’ should only be selected where a business does not engage in any economic activity. These businesses will potentially still be eligible for Employment Allowance, but it would not be classed as de minimis State aid. The Guidance on RTI Items from April 2020 states that the ‘State aid rules do not apply to employer’ field should only be selected by employers who do not undertake any economic activity, for example, if they are a charity, a community amateur sports club or are employing someone to provide personal care. If a business is not undertaking any economic activity, then De minimis State aid rules are not applicable.
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Government consultation: a NICs holiday for employers hiring former members of the UK regular armed forces 22 July 2020 HMRC has published a consultation, with the aim of collating views and opinions from businesses that employ veterans, software providers and accountants on the topic of potentially granting employers a National Insurance Contributions (NICs) holiday where they employ individuals who were previously members of the regular armed forces. Originally announced back in March 2020, at Budget, the measure would mean that employers would not pay any NICs liability on the salaries of veterans up to the Upper Secondary Threshold for the duration of their first year of civilian employment. This relief would be available to employers from April 2021, with transitional arrangements in place, until April 2022, at which point businesses will have the ability to claim the relief in real time through PAYE. The consultation asks questions on a variety of issues and about how the government should approach the design and implementation of the policy. The government has placed particular emphasis on how it should seek to define ‘veterans’, employment periods that should qualify and how the measure should be administered.
CIPP comment
The CIPP’s Policy and Research team will be responding to this consultation, and will be incorporating the views of payroll professionals on the subject. Please keep your eyes peeled for a survey which will be published in due course, which will query aspects of a potential NICs holiday for employers who hire former members of the UK regular armed forces.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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