Consultation outcome

Draft legislation: Employment Allowance eligibility reforms

This consultation has concluded

Detail of outcome

We received several responses, mainly from advisory firms, representative bodies and businesses affected by the rules.

The government has addressed the comments in the responses by amending the statuary notice to reflect a change to the data being requested: employers will no longer have to provide information about other de minimis state aid they have received or been allocated.

Other comments and feedback have been reflected in enhanced guidance and communications products to support employers.

You can read:

Original consultation

Summary

This technical consultation seeks views on the draft regulations and related documents that will reform the eligibility rules for the Employment Allowance by targeting it at smaller businesses.

This consultation ran from
to

Consultation description

HM Revenue and Customs (HMRC) has published a draft statutory instrument and draft statutory notice for technical consultation with a draft explanatory memorandum and draft tax information and impact note.

We welcome comments on these draft documents, which will be of most interest to employers and businesses, particularly those which are larger or that are in receipt of state aid, and especially if it is state aid provided under the de minimis rules.

The draft legislation will provide that employers with a Class 1 secondary National Insurance liability of £100,000 or more in the preceding tax year are ineligible for the Employment Allowance.

To claim the Employment Allowance, employers must have space for the full Employment Allowance (currently £3,000) within their relevant de minimis state aid threshold.

The draft statutory note sets out the information requirements for employers claiming the Employment Allowance from April 2020.

The draft tax information and impact note will help explain the potential impact of the proposals on the economy, business, individuals, and other areas.

We recommend you read the:

  • draft legislation
  • draft explanatory memorandum
  • draft tax information and impact note
  • draft statutory notice

The regulations will be made under powers in section 5 of the National Insurance Contributions Act 2014 and, as has been previously announced, a final version of the regulations and guidance will be published in October 2019.

The legislation is intended to take effect from 6 April 2020.

Documents

(Draft) Employment Allowance (Excluded Persons) Regulations 2019

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(Draft) explanatory memorandum - Employment Allowance (Excluded Persons) Regulations 2019

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(Draft) tax information and impact note - Employment Allowance (Excluded Persons) Regulations 2019

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(Draft) statutory notice - Employment Allowance (Excluded Persons) Regulations 2019

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Published 25 June 2019
Last updated 29 January 2020 + show all updates
  1. Published consultation outcome, link to final regulations and link to tax information and impact note.

  2. First published.