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Employment Allowance: common errors by businesses revealed

Newsletter issue – February 2025

A list of the biggest mistakes and errors made by businesses when claiming Employment Allowance and reporting their Apprenticeship Levy has been revealed.

As part of new guidance to help employers conform with both schemes correctly, HMRC has published a list of the most common errors businesses make to help them avoid these in future.

'Following these guidelines will help to reduce your risk of making errors, therefore reducing the risk of any penalty charges,' HMRC stated.

These Guidelines for Compliance are for all employers. The most common errors companies make are as follows:

  • failing to recognise they are a company
  • not being aware of the 'connected companies' rules and/or failing to identify all their connected companies
  • not being aware that their group structure has changed
  • relying on payroll software or payroll agents to identify connected companies

The recently added guidelines are a 'practical product for customers to refer to and should be read alongside HMRCs existing guidance,' officials said, adding: 'They aim to help employers identify connected entities, enabling them to report their Apprenticeship Levy liability and claim Employment Allowance correctly.'

Check out the new document to see a summarised version of rules for the Apprenticeship Levy and Employment Allowance and find help with specific issues public body customers encounter.

 

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