As from 2020/2021 claiming of the Employment Allowance is subject to the claimant making a correct de minimis State Aid declaration. Without making a de minimis State Aid declaration, you will not be entitled to the Employment Allowance.
If you wish to claim the Employment Allowance please kindly answer the questions set by HMRC. Click on the link for more information about de minimis State Aid and Employment Allowance : https://www.gov.uk/guidance/changes-to-employment-allowance
1) Am I eligible to make a claim for Employment Allowance from April 2020 under the new Employment Allowance reform? (or) What checks do I need to do before submitting a claim for Employment Allowance through EPS?
1.1) Employers’ (secondary) Class 1 National Insurance Contributions threshold check - Was your employers' (secondary) Class 1 NICs liability less than the legislated threshold in the previous year?
You can find further info at https://www.gov.uk/government/publications/employment-allowance-more-detailed-guidance
1.2) de minimis State aid threshold check - Does your business undertake economic activity?
If De minimis State aid rules will apply to your business and you must select "YES" against which sector(s) your business falls under, choose all that apply from -
(Not involved in Agriculture, Fisheries and Aquaculture or Road Transport sectors?)
(If your business does NOT belong to Agriculture, Fisheries and Aquaculture or Road Transport sectors, then please state YES)
(Answer : Yes, means State-aid rules are not applicable as you are not undertaking any economic activity such as Charities, CASC, Employing someone to provide personal care.)
(Answer : No, means State-aid rules are applicable, and you have indicated your economic activity by answering 'Yes' to any one of the above 4 questions)
You must ensure that when you add the full Employment Allowance in the claim year (converted to Euro) to any other de minimis State aid (already received or allocated in the claim year and previous two tax years), does not exceed the de minimis State aid threshold for the specific trade sector. If the total exceeds the threshold, you won't be eligible to claim.
You can find details of the ceilings for each sector at https://www.gov.uk/claim-employment-allowance and more information about State aid at https://www.gov.uk/guidance/state-aid
You can find the eligibility details for making an EA Claim at https://www.gov.uk/claim-employment-allowance/eligibility.
2) Can Employment Allowance for past years (earlier tax years) be claimed?
Yes, you can make a claim for the Employment Allowance up to 4 years after the end of the tax year in which the allowance applies.
For example, if you want to claim Employment Allowance for the tax year 2016-2017, you must make your claim by no later than 5 April 2021.
For more detailed information, refer to the HMRC link https://www.gov.uk/claim-employment-allowance/when-to-claim.
3) Can the unused Employment Allowance be carried forward?
The earlier you make an Employment Allowance Claim, the sooner you will get it.
In case you make a late claim and have a huge unused Allowance, you’ll need to ask HMRC to do one of the following:
For more detailed information, refer to the HMRC link https://www.gov.uk/government/publications/employment-allowance-more-detailed-guidance/claiming-employment-allowance-further-employer-guidance.
4) How much can you claim?
An eligible employer is entitled to claim up to £4,000 in this current tax year (2020/2021). Employment Allowance will reduce your employers’ (secondary) Class 1 National Insurance liability each time you run your payroll until the £4,000 is used up, or the tax year ends, whichever is sooner.
5) When to claim for Employment Allowance?
You can claim Employment Allowance at any time during the tax year.
If you are continuing a claim from the tax year 2019/2020 to the tax year 2020/2021, you must send an EPS in month 1.