Employment allowance reform

The measure

The employment allowance currently provides businesses and charities with up to a £3,000 reduction in their employer NIC bill.

The government has announced that it will now focus the employment allowance on smaller businesses. From April 2020 it will therefore restrict access to employers with an annual NIC bill below £100,000. The government estimates this means that 99% of micro-businesses and 93% of small businesses will still be eligible for the employment allowance.

Who will be affected?

Businesses with an annual NIC bill of £100,000 or more will no longer be eligible to claim the employment allowance from April 2020.

When will the measure come into effect?

This measure will be implemented from 6 April 2020. 

Our view

Small businesses and micro-businesses with an annual NIC bill below £100,000 will welcome the fact they will continue to be able to access the employment allowance. 


Mark Groom

Mark Groom


Global Employer Services Policy Lead