A8.205 Interaction between the employment allowance and the coronavirus job retention scheme (CJRS)
There has been some confusion about the interaction between the employment allowance and the coronavirus job retention scheme (CJRS).
This article discusses how the two sets of rules work together and considers the following potential issues that may have arisen in practice:
• claimed the employment allowance and made reduced CJRS national insurance contributions (NIC) grant claim
• claimed the employment allowance and overclaimed CJRS NIC grant
• avoiding double relief where the claim for employment allowance is made mid-tax year
• insufficient NIC liability to utilise employment allowance in the rest of the tax year
Before covering the interaction, it is worth summarising both provisions.
Coronavirus job retention scheme (CJRS)
Under the CJRS, employers may be able to obtain a grant from the Government up to a limit to cover a percentage of the total of1:
• furloughed employees' wages (up to a cap)
• the associated employer secondary Class 1 NIC (up to 31 July 2020, as employers must pay these costs from 1 August 2020 onwards), and
• the minimum employer automatic enrolment pension contributions (up to 31 July 2020, as employers must pay these costs from 1 August 2020 onwards)
For full details of the scheme, see A8.201–A8.204.
From 6 April 2020 onwards, the employment allowance is £4,000 per tax year. It is used to reduce the employer's secondary Class 1 NIC payment due to HMRC. It cannot be used against the employer's Class 1A
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