Employment allowance

A reduction in employer's National Insurance for eligible employers. Claimed, not automatic.

What it means

The Employment Allowance reduces an eligible employer's annual Class 1 secondary National Insurance bill by up to a set amount.

Why it matters

It is worth real money to a small employer and it is claimed through payroll software — if nobody ticks the box, it is simply not received.

What it looks like in practice

Eligibility excludes companies where a single director is the only employee, and there are rules for connected companies and for public-sector work.

What to watch out for

Claiming when not eligible, which HMRC recovers. And not claiming when eligible, which nobody tells you about.

Where to get proper advice

Your payroll provider or accountant. HMRC's guidance sets out the exclusions.