Employment allowance update for 2016/17

Independent pharmacy businesses can claim an increased Employment Allowance for 2016-17.
From 6 April 2014, independent pharmacy businesses (which meet certain eligibility criteria) could claim up to £2,000 in Employment Allowance.

For 2016-17, the allowance has increased to a maximum of £3,000 and can be claimed against secondary Class 1 National Insurance Contributions (NICs) paid by the company, even if the company pays less than £3,000 a year in NICs. It will reduce the Class 1 NICs every time the payroll is run until the maximum allowance of £3000 has been used up or the tax year ends (whichever is sooner).

The allowance cannot be claimed for Class 1A or 1B NICs or by limited companies where the director is the only paid employee in the company paid above the Secondary Threshold. The allowance can be claimed at any time in the tax year (if eligible). In addition, it can only be claimed against one nominated PAYE scheme therefore where companies are connected, only one company out of a group of companies can claim the allowance. Further information on how to claim the allowance is available on the GOV.UK website.

HMRC has also produced a suite of additional guidance for employers regarding the Employment Allowance. NPA members are advised to contact their accountant to ensure that the allowance is claimed at the earliest opportunity (if eligible), and to check their own individual circumstances with the HMRC by telephone on 0300 200 3200.

For information on this or any other query, NPA members can contact the NPA Pharmacy Services Team on 01727 891 800 or email pharmacyservices@npa.co.uk.

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