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HMRC internal manual

National Insurance Manual

HM Revenue & Customs
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Employment Allowance: Recovering wrongly awarded claims (includes penalties and interest charged)

Social Security (Contributions) Regulations 2001, Regulations 67 & 67A

If an employer discovers they have made an invalid claim for the Employment Allowance they should immediately cease from making any further deductions from their secondary class 1 NICs liabilities and withdraw the invalid claim by following the procedures contained at NIM06580.

HMRC will apply the standard collection and recovery powers for recovering any wrongly discharged tax and NICs liabilities arising because of an invalid claim for the Employment Allowance.

Penalties and late payment interest charged

If an employer revokes their claim for the Employment Allowance and repays all of the tax/NICs liabilities that were discharged because of that claim, then HMRC may charge that employer late payment interest and penalties because those liabilities were not paid on time.

However, this will depend on the circumstances of each case whereby other factors will be considered, such as whether the employer paid their other PAYE liabilities on time and how many months the employer wrongly claimed the employment allowance.