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HMRC internal manual

PAYE Manual

Employer returns: NICs employment allowance: employers with multiple PAYE schemes

Employers with more than one PAYE scheme can only claim the Employment Allowance from one PAYE scheme in that year, regardless of how many PAYE schemes they operate. It is up to the employer to nominate the PAYE scheme on which they want to claim the allowance.

Where an employer with more than one PAYE scheme is eligible for the Employment Allowance but finds that their nominated scheme did not use the full amount in the tax year (because the scheme’s Class 1 NICs liability was less than the maximum allowance on the nominated PAYE scheme), the employer can claim the remaining balance of the Employment Allowance due after the end of the tax year from HMRC, up to a maximum of £2000 for tax years 2014-15 and £3000 for tax years 2016-17 onwards, provided there is an employer Class 1 NICs liability on the other PAYE schemes.

Once the Employment Allowance has been claimed on a PAYE scheme, the notice will apply against that PAYE scheme in subsequent tax years. The employer and HMRC staff, whenever they are dealing with Employment Allowance claims, must ensure that the allowance is claimed on a single PAYE scheme in the current and subsequent tax years.