Employment allowance for small charities

07.08.2023
Rebecca Frost
Charities
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Small charities with employees are often unaware that they are eligible for the Employment Allowance. This enables them to reduce their annual National Insurance liability by up to £5,000, so long as their total NI liabilities were less than £100,000 in the previous tax year. Unincorporated charities and Community Action Sports Clubs are also eligible.

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If your charity is unconnected to any other charities, it should be fully eligible. If however it forms part of a group of connected charities, then between the group only one Employment Allowance can be claimed. This would apply in the following circumstances –

  • A charity has 50% of trustees in common with another charity with similar activities

  • One trustee controls your charity and another charity with similar activities

Our payroll bureau can assist you with claiming for the Employment Allowance, and with backdated claims for the previous 4 tax years (currently dating back to 2019/20).

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