Increase in the National Insurance contributions (NICs) employment allowance

Businesses, Charities and Community Amateur Sports Clubs are able to reduce their Employer Class 1 National Insurance contributions (NICs) bill by up to £2,000 every year by claiming the Employment Allowance. However, following the Summer Budget announcement this will increase to £3,000 from 6 April 2016.

The measure

The government will increase the National Insurance contributions (NICs) employment allowance from £2,000 to £3,000 a year.

From April 2014, every business, charity and community amateur sports club has been entitled to an annual ’employment allowance’ of £2,000 to reduce their liability for Class 1 secondary NICs.

The government has announced it will increase the Employment Allowance to £3,000 a year from April 2016.

To ensure that the NICs employment allowance is focussed on businesses and charities that support employment, from April 2016, companies where the director is the sole employee will no longer be able to claim the employment allowance.


Who will be affected?

All businesses, charities and community amateur sports clubs.


This measure will be introduced from April 2016.

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