Employment Allowance Changes - Withdrawing Employment Allowance Claim

Some companies that have previously claimed employment allowance may no longer been eligible to received employment allowance. The article covers withdrawing an employment allowance claim.

Employment Allowance Changes

Employment allowance is now operated as De Minimis state aid. More Info. Companies with an (secondary) Class 1 NI liability (Employers NI) of more than £100,000 are no longer eligible to receive employment allowance. More Info

Employment allowance claim status

From April 2021 all companies will need to claim employment allowance at the start of each tax year. During year end migration all companies with employment allowance in the last tax year have had there claim reset. Once state aid sector has been indicated, the employment allowance claim will be sent in the first EPS sent. You can check the state of your EA claim by going to "Company Maintenance > Tax and NI".

1)  EPS not sent

2) EPS sent

1) Withdrawing employment allowance claim if EPS has not been sent

1. Open "Company > Company Maintenance > Tax and NI" 
2. Confirm employment allowance message is "EA claim not submitted"
3. Open "Claim Employment Allowance" window
4. Untick "Claim Employment allowance?"
5. Save and Close the Employment Allowance Window
6. Save Company Maintenance.

You will now see the message "Employment Allowance Not Claimed".

2) Withdrawing employment allowance claim if EPS has been sent

1. Open "Company > Company Maintenance > Tax & NI" 
2. Confirm employment allowance message is "EA Claim Submitted … "
3. Open "Claim Employment Allowance" window
4. Untick "Claim Employment allowance?"
5. Save and Close the Employment Allowance Window
6. Save Company Maintenance.
7. You will now see the message “EA Claim withdrawal not submitted” 

8. Close Company Maintenance 
9. Open “File by Internet > Submit to HMRC” select the EPS option and click OK
10.  Click Submit.

You can check the claim has been withdrawn by opening "Company Maintenance > Tax and NI". You should see the message “Withdrawal submitted on ….”       

Note: when submitting the EPS to claim employment allowance if you have not processed payroll select month 1, otherwise select the pay period you are processing. If you have started to process payroll and receive the message “The P32 needs to be run for this period” complete the payroll, run the P32 report and then send an EPS.

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