Draft Employment Allowance (Excluded Persons) Regulations 2019 - CIOT comments

By Technical Team on 14 Aug 2019

The Chartered Institute of Taxation (CIOT) has responded to the technical consultation on the draft statutory instrument, statutory notice, explanatory memorandum and tax information and impact note (TIIN) amending the eligibility rules for the Employment Allowance (EA), which were published on 25 June 2019. 

CIOT agree that the draft legislation will result in employers with a Class 1 secondary National Insurance liability of £100,000 or more in the preceding tax year being ineligible for the Employment Allowance (EA) with effect from April 2020.

However, we have concerns with the information requirements for employers claiming the EA from April 2020, which arise from the EA being reclassified as EU State Aid. In particular, the information that will be required to be submitted through the PAYE system to certify that de minimis EU State Aid thresholds have not been exceeded in order to claim a maximum of £3,000 in EA will place an onerous burden on employers and some employers may decide the burden outweighs the benefit.

Our detailed comments can be found here and the draft legislation here.

Technical Team