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  • RE: Employment Allowance - Director Resigns

    Thank you but I am not clear. You say "If the criteria is met then you would not be able to claim EA." - is there a typo here? If we change the nature of the question, and have an actual case of a Director having already resigned, and getting salary as an employee in the month of March 2024, can you not confirm whether the company can claim the Employment Allowance?
  • Employment Allowance - Director Resigns

    I have a limited company currently with two directors. One of them (Director 1) is providing services via this company which is what is earning the company its revenues. They are also employed elsewhere and pay NI / tax etc. The other (Director 2) manages the company affairs and admin and has some personal allowance currently un-utilised. In order to be tax efficient, I am considering paying Director 2 a salary of £12,570. Now, this would normally result in Employers' NI for the company. However, I note there's an Employment Allowance which says up to £5k doesn't need to be paid. There are conditions to this, and the key one I am looking at is: You also cannot claim if both of the following apply: 1. you’re a company with only one employee paid above the Class 1 National Insurance secondary threshold 2. the employee is also a director of the company I am thinking - we have Director 2 resign as a director now. Then, in this last month of the tax year 2023-24, we pay Director 2 a salary of £12,570. My reading then of the situation is that "both" of the rules above don't apply - in particular, because the salary is paid to Director 2 - who following their resignation - is no longer a director of the company. Am I understanding this incorrectly?