QUESTION: I operate a small landscaping company and occasionally take on staff to help during busy periods, typically students outside of term time. Since these are not long-term employees, can the company still claim Employment Allowance?
ANSWER: Yes, your business may be eligible to claim Employment Allowance, even if your staff are temporary or seasonal.
Employment Allowance allows eligible employers to reduce their annual national insurance liability — rising to £10,500 from April 2025 (previously £5,000 for the 2024/25 tax year). It applies to employer class 1 national insurance contributions (NICs).
To qualify, a business must have at least one employee (who is not also a director) and pay them above the secondary threshold, therefore giving rise to a class 1 national insurance contributions (NICs) for their wages. The secondary threshold is £96 per week, amounts paid over this give rise to employer’s NICs at a rate of 15%.
There are other exclusions that would mean an employer is not eligible; such as employing individuals for your personal household, more that half your work is in the public sector or the class 1 NICs in the previous tax year exceeded £100,000.
Provided the threshold is met for these employees and the above exclusions do not apply, the fact that your staff are students or only work short-term is not a barrier. There’s no requirement for employees to be full-time or permanent. If you’re paying class 1 NICs on their earnings, those contributions count toward eligibility.
Once eligible to claim, Employment Allowance will also apply to any employer NICs due on a director’s salary.
However, you’ll only become eligible once the conditions are met — in your case, likely not until your seasonal employees earn enough to cross the secondary threshold.
So, you may not be able to claim until the summer, when your payroll first triggers employer NICs for non-director employees in the tax year.
You can claim via your payroll software or using HMRC’s basic PAYE tools. Once claimed, it’s applied automatically until the allowance is used or the tax year ends.
Be aware that HMRC actively recovers incorrect claims, so it’s important to ensure all conditions are met before applying. If in doubt, consult your tax adviser or payroll provider before submitting a claim.
- KellyAnne Murtagh ([email protected]) is tax director at AAB Group Accountants Ltd (www.aabgroup.com). The advice in this column is specific to the facts surrounding the question posed. Neither the Irish News nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.
