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Restricting the Employment Allowance – some welcome Budget news

Budget 2016 announced that from April 2018, the £3,000 Employment Allowance would be removed for one year from those who receive civil penalties from the Home Office for employing illegal workers. It is estimated that up to 2,000 employers would be affected.

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The Employment Allowance (Disqualified Persons) Regulations 2017 were open for consultation until 3 January 2017 with the intention that they would come into effect on 6 April 2017.


Budget 2017 on 8 March 207 announced that “the government has decided that this should not be taken forward at this point in time because of concerns raised around complexity”.


This would have meant an additional administration burden, as employers that were impacted would have needed to amend their payroll software via the Employer Payment Summary (EPS) to ensure that they did not claim the Employment Allowance during the year in which they do not qualify.


Some welcome Budget news for a change!


Ian Holloway head of legislation and compliance at Cintra HR & Payroll Services

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