Hi June,

Thank you for using the Community hub.

The NIC which isn't eligible to be offset against the Employment Allowance, is NIC collected from Deemed employees.

An example of a Deemed employees would be a contractor who is "employed" by someone else but you are paying for their work directly via your payroll.

This is also known as IR35, and off-payroll working.

The tax and NIC liability of the Deemed person will be collected by yourself on behalf of HMRC.

It is that NIC which the Employment Allowance can't be used against.

There is more information in the article link below, if you are interested.

Off-payroll working rules - IR35.

If you have values on line 8 in your P32, make sure you have not any employees wrongly selected as Deemed.

Read the section in the article "Correcting an incorrectly marked worker".

Kind regards,

Nigel

Sage UKI

Hi Nigel.  Thank you so much for your response.  I do indeed have a worker ticked as a deemed employee and wasn't aware of that until I checked.  However, HMRC confirmed that the full EA has been applied to the company so the employee is recognised as being on the payroll.  I have now amended the record so this shouldn't show up going forward.  Thanks again, much appreciated.

Hi Nigel.  Thank you so much for your response.  I do indeed have a worker ticked as a deemed employee and wasn't aware of that until I checked.  However, HMRC confirmed that the full EA has been applied to the company so the employee is recognised as being on the payroll.  I have now amended the record so this shouldn't show up going forward.  Thanks again, much appreciated.