Readers' forum : Claim or disclaim?

25 April 2017

Issue: 4596 / Categories: Forum & Feedback

HMRC’s RTI treatment of employment allowance for ‘one-man companies’.

As I understand it a ‘one-man company’ no longer qualifies for employment allowance deduction against class 1 National Insurance. I currently have three such companies on annual PAYE schemes for which I have just processed the annual salary so it is only now that I have realised that the HMRC RTI system seems to award them the employment allowance anyway.

I submitted the details of the payment to the director which showed the correct earnings-related National Insurance contributions (ERNIC) deduction. I then clicked ‘calculate amount due to HMRC’: the system calculated ERNIC and then removed it with the employment allowance.

There appears to be no immediately obvious way of disclaiming the employment allowance – there may be a setting somewhere in the RTI system that I need to find but I have yet to do so. I will tell the clients to pay the higher amount...

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