Activating Employment Allowance

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Activating Employment Allowance

6th January 2020

IRIS Payroll Business, IRIS Bureau Payroll

How to activate employment allowance in  Bureau Payroll and Payroll Business

To activate employment allowance go to “Company” > “Company Details” > “HMRC” and tick the option to activate Employment Allowance.

The “maximum employment allowance” value should be left unchanged unless you are taking over payroll part way through the tax year.

Please Note: For tax year 20/21 employment allowance in changing, see KB:11830 for details.

PLEASE NOTE: Employment allowance status is reported to HMRC via the EPS. The EPS does not include any values for employment allowance. When you activate employment allowance the next EPS you send will show the status as “Yes”. HMRC do not need to hear anything else about employment allowance until the status changes, as such further EPS submissions (EVEN IF RESENT FOR THE SAME PERIOD) will show the status as “None”. If you then deactivate employment allowance the next EPS will show the status as “No”.

For further details on reporting employment allowance to HMRC click here.

Employment allowance is calculated when you perform month end processing. If you activate employment allowance part way through the tax year you will need to re do the month end processing from the start of the tax year, from April up to the most recent period.

For assistance with month end processing click here.