Employment Allowance consultation launched
Newsletter issue - December 2016.
HMRC have launched a technical consultation on proposals to restrict the Employment Allowance (EA) from employers of 'illegal workers'. The consultation is open for comments until 3 January 2017.
Budget 2016 announced that from April 2018, the EA would be removed for one year from those who receive civil penalties for employing illegal workers. Broadly, the allowance entitles the vast majority of businesses, charities, and community amateur sports clubs to a reduction of up to £3,000 per year on their employer National Insurance Contributions (NICs) bill. Whilst the allowance has very broad eligibility, the Government believes that those who break the law by employing illegal workers should not benefit from it. The purpose of the restriction therefore is to ensure the allowance focuses on employers who are providing legitimate employment.
The proposed change will only impact employers who have received a civil penalty from the Home Office for employing workers subject to immigration control and have exhausted their Home Office appeal rights in relation to that civil penalty. Early estimates suggest that around 2,000 employers will be affected.
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