Sign up for £2,000 national insurance saving

Farm businesses will be able to cut their employer national insurance contributions (NICs) by £2,000/year from April 2014 thanks to a new “employment allowance”.

HM Revenue & Customs estimates that up to 1.25 million employers will benefit and those with fewer than 10 employees could pay about 80% less over the year.

Farmplan product co-ordinator Sally Ashwell talked Farmers Weekly through getting the benefits.

  1. Opt in to get the reduction. Payroll software and HMRC’s Real Time Information system will include a yes/no indicator for the allowance on the employer payment summary (EPS) for each month. Tick the box at the end of the first month you wish to claim for and the allowance will be offset against each month’s secondary NICs payments until it is all claimed or the tax year ends.
  2. One £2,000 allowance for each employer, not each PAYE scheme. If you have different PAYE schemes you must pick one of them to claim the £2,000 allowance on. If you don’t hit the total over the year for one scheme, you can apply to HMRC for payment of the balance after the end of the tax year.
  3. Watch out for exemptions. The employment allowance is not available on PAYE schemes used to employ domestic staff such as nannies or care workers, or where you are the only employee.
  4. Check what constitutes a business. Some farmers will have more than one business so they will have to clarify with HMRC what is eligible.
  5. Claim later if you miss the start. The indicator for the employment allowance can be ticked at any point and will be included in the next EPS. Businesses that do not claim during a tax year can make a claim to HMRC retrospectively.

Are you, like many other farms, missing out on tax claims for R&D?

If you’re a limited company, you could be eligible for tax credits if you’re carrying out R&D on your farm. For more information and to find out if you’re eligible visit our R&D tax credits page.

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