NI Employment Allowance

[cheeky_chops]

I questioned my new accountant that we (2 directors, both PAYE Secondary Threshold £1k pm) should be able to claim NI employment allowance as i have done with old accountant. The below HMRC guidance says you can:

Very last example - https://www.gov.uk/government/publications/employm...

I sent above link to new accountant so she queried it with HMRC - reply was "HMRC have said we must be able to prove the director's have a contract of employment with the company in order to claim the employment allowance."

Im assuming that is

A: right (...and the HMRC bod wasnt an idiot)
B: would a directors employment contract look like in its most basic form? A quick google show we should have "service contracts" too

Nothing is simple... What are others doing?

[cheeky_chops]

bttt - any thoughts greatly received

[wheelerc]

I think they are wrong. I'd say you can claim employment allowance with two directors as long as they are paid above the threshold.

https://www.gov.uk/government/publications/employm...

The above guidance specifically mentions husband/wife directors.

"Directors must be paid above the annual Secondary Threshold (£8,112 for 2016 to 2017, or pro-rata if the directorship began after the start of the tax year)."

I assume you are both paid somewhere around £12,570 per year.

[Pistom]

Never heard of needing to prove a contract of employment exists for this. Your accountant applies and it comes through automatically. It's your Directors responsibility to ensure they meet the requirements.

My dealings with HMRC since Covid indicates nobody knows what they are doing there any longer and the temps they bring in get their information off Chat GPT.

[cheeky_chops]

thanks - as i thought. Will tell the accountant weve got contracts (can get vanilla director ones online for £10) and to apply the allowance.