Employer NI allowance 2016-17

[PurpleMoonlight]

I appears that a sole Director employee business is not entitled to this, but a two director or one director and one employee business is.

Is this correct please?

[Beetnik]

Yes.

[PurpleTurtle]

So, if I was running my one man band IT Company, and (because she hasn't returned to work after having a baby) I have employed my wife to do my admin and am paying her a small salary) I can still claim it?

[Jockman]

PurpleTurtle said:

So, if I was running my one man band IT Company, and (because she hasn't returned to work after having a baby) I have employed my wife to do my admin and am paying her a small salary) I can still claim it?

Will she be on the payroll? The Employee on Mat Leave will still be on the payroll, if Im reading your post correctly.

[JBM78]

PurpleTurtle said:

So, if I was running my one man band IT Company, and (because she hasn't returned to work after having a baby) I have employed my wife to do my admin and am paying her a small salary) I can still claim it?

If the two of you are on the payroll, yes.

But remember that by the time you start to make a saving due to the employment allowance, she'll be paying employees' NI at 12% while the company saves tax at 20%, so don't expect huge savings....

The above only applies to salaries up to the personal allowance, at which point there's no point in increasing salary to use up more employment allowance as she'd suffer PAYE (20%) plus employees' NI (12%) while still only saving corporation tax at 20%.

Maximum saving is in the region of £200 I think, so not hugely beneficial...

[Jockman]

Employee NI begins at £8,060, well below the £11k personal allowance - still doable though

[PurpleTurtle]

Jockman said:

PurpleTurtle said:

So, if I was running my one man band IT Company, and (because she hasn't returned to work after having a baby) I have employed my wife to do my admin and am paying her a small salary) I can still claim it?

Will she be on the payroll? The Employee on Mat Leave will still be on the payroll, if Im reading your post correctly.

Yes, officially on the payroll, her only employment - didn't return to old job due to travel & childcare costs wiping out nearly all her salary