Employment allowance for small charities

07.08.2023
Rebecca Frost
Charities
Donating Toys

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.

Donating Toys

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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