From April 2020 the rates for the National Living Wage and the National Minimum Wages are increasing. The changes are shown in the table below:
|Year||25 and over||21 to 24||18 to 20||Under 18||Apprentice|
|April 2019 (current rate)||£8.21||£7.70||£6.15||£4.35||£3.90|
Apprentices are entitled to the apprentice rate if they are either aged under 19, or aged 19 and over and in their first year of their apprenticeship. This only applies to their first apprenticeship and cannot be used again if they decide to start a different apprenticeship. It is your responsibility as the Employer, to make sure that you have a complete employment history, so no errors are made.
From April 2020, employers will only be entitled to Employment Allowance if their total secondary Class 1 National Insurance liability in the previous tax year was under £100,000. It is also being classed as State Aid and will fall under the de minimis state aid rules (see below). There is a ceiling to the amount of aid an organisation can receive. For most businesses this will be €200,000 over a three year rolling period.
So that HMRC can monitor the compliance with eligibility and state aid rules, they are introducing new compliance obligations for those who claim it. This includes requiring employers to supply the following information each year:
- The trade sector in which they operate.
- The total amount of de minimis state aid (see above) they have received or been allocated in the year of the claim and the previous two years.
HMRC are also proposing that employers will have to make a declaration that:
- They have checked that their total secondary Employers Class 1 National Insurance liability in the previous tax year was under £100,000.
- They have made relevant checks with connected companies to ensure they are eligible for relief and they are the only connected company claiming Employment Allowance.
- To the best of their knowledge they will not exceed the de minimis ceiling for state aid for their sector by claiming Employment Allowance.
- They are not aware of any reason why they might be excluded from making a claim.
If your business is affected or you would like to discuss any of the points above, please contact the office on 01483 475073.