The Employment Allowance introduced in 2014 allows most businesses a deduction of GBP 2,000 a year (GBP 3,000 a year from April 2016) from their liability for employers’ national insurance contributions. With effect from April 2016 the Employment Allowance will no longer be available to companies whose director is the only employee. The reason given for excluding these businesses is that the regulations need to focus on businesses that support employment. It is estimated that the measure will affect around 150,000 companies in the UK.
Draft legislation has been published for consultation. Interested parties are requested to comment on whether the regulations achieve their objectives; and to point out if there are any unintended consequences. The closing date for comments is 3 January 2016.
