Employment allowance suspension for employers of illegal workers

The government is consulting on draft regulations to remove the entitlement to employment allowance for one year from employers that receive civil penalties for employing illegal workers. The employment allowance entitles most businesses to claim a reduction of up to £3,000 per year on their secondary NICs bill.

This measure, which is due to start in April 2018, will only impact employers which have received a civil penalty from the Home Office for employing workers subject to immigration control, and have exhausted their Home Office appeal rights in relation to that civil penalty. Early estimates suggest this will affect around 2,000 employers.

These employers will not be eligible to claim the employment allowance for the tax year following the year in which they exhausted their appeal rights, or chose not to appeal. The regulations will also apply to employers connected with an employer that has received a civil penalty in these circumstances.

Consultation on the draft Employment Allowance (Disqualified Persons) Regulations 2017 will run until 3 January 2017. See http://bit.ly/2eT0fJE.