Following a consultation that closed on 3 January 2016 the UK is to implement changes to the conditions for eligibility for the employment allowance. This allowance reduces the liability for employer’s national insurance contributions and amounts to GBP 2,000 per year, rising to GBP 3,000 per year from April 2016.
The proposed changes will be made by revisions to Section 2 of the National Insurance Contributions Act 2014 through secondary legislation on the definition of excluded companies. The changes mean that limited companies with only one director and no other employees will not be eligible for the allowance from 6 April 2016.
The legislation is intended to better target the employment allowance towards employers who may take on additional staff. The UK government considers that companies with a single director and no other staff should not benefit from this allowance that is designed to help employers meet the costs of employing staff. The measure is expected to affect around 150,000 companies in the UK.
