PAYE56040 | Employer returns: NICs employment allowance: employers not eligible for employment allowance

If an employer who is not eligible claims the Employment Allowance, HMRC staff can override their request meaning that any Employment Allowance already claimed becomes payable to HMRC with the next payment of PAYE liabilities.

Employers should check and then declare their own eligibility for the Employment Allowance where this applies. This means that HMRC will use the override function on a limited basis to cancel eligibility (for example following compliance activity). Where this happens, HMRC must inform the employer that their claim has been cancelled and that the amounts previously claimed must now be repaid with penalties and interest where these apply.

Where an employer changes the nature of their work again to become eligible for the Employment Allowance, provided the employer can demonstrate eligibility, HMRC will reverse the override for the employer to claim the Employment Allowance, though not retrospectively.

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