The employment allowance was introduced to effectively save employers National Insurance on their employees wages.
It was a pretty decent saving.
At the moment, if you claim employment allowance, you can save a whopping £2,000 on Employers National Insurance.
The government was so excited about it that a letter from 10 Downing Street actually went out to many companies on the Companies House register.
The good news is that this employment allowance is going up to £3,000 from 5 April 2016.
The bad news is that if you are a 1 person limited company, you will probably lose the employment allowance altogether since the government is likely to restrict this allowance to businesses that don’t really have other employees (other than themselves).
On a minimum salary of £11,000, this equates to a new tax bill of £406 – not a good.
We probably won’t know for a sure until the new budget on March 16.
