---
title: "Employment Allowance: Can You Claim After the Tax Year Has Started?"
description: "**Last updated:** 14 October 2026 ## Can you claim Employment Allowance after the tax year has started? Yes. You can claim the Employment Allowance at any point in the tax year through your payroll software, and it will be offset…"
url: "https://accotax.co.uk/knowledgebank/employment-allowance-claim-after-tax-year-started/"
updated: "2026-10-16"
category: "Monthly Tax Q&A"
tags:
  - backdated claim
---

# Employment Allowance: Can You Claim After the Tax Year Has Started?

**Last updated:** 14 October 2026

## Can you claim Employment Allowance after the tax year has started?

Yes. You can claim the Employment Allowance at any point in the tax year through your payroll software, and it will be offset against employer Class 1 NIC from then on. You can also claim for the previous 4 tax years if you were eligible but didn't claim. For 2026/27 the allowance is £10,500, and since April 2025 there's no longer a £100,000 limit on your previous year's NIC bill.

## Who can claim in 2026/27

| Eligible | Not eligible |
| --- | --- |
| Businesses and charities with employer NIC liabilities | Companies where the only employee paid above the Secondary Threshold is a director |
| Community amateur sports clubs | Public bodies and most businesses doing 50%+ public work |
| Companies with 2+ employees, including a director | Employees for personal, household or care work (with some exceptions) |

## How to claim mid-year

1. Select "Employment Allowance indicator" in your payroll software

2. Send an Employer Payment Summary (EPS) to HMRC

3. The allowance is set against employer NIC on the next payment until it is used up

4. If you are part of a group, only one company can claim

## Claiming for past years

If you didn't claim in an earlier year, you can still claim for up to 4 years. Each year has its own rules and amounts. For example, it was £5,000 for 2024/25 and £4,000 for 2022/23 and 2023/24. HMRC will offset the amount against the PAYE you owe or repay it.

## Common errors

HMRC has highlighted errors that cause claims to be refused:

- Single-director companies claiming when the director is the only paid employee
- Groups claiming more than one allowance
- Claiming twice by running separate payrolls
- Not checking state aid limits for businesses in certain sectors
- Not taking connected companies into account

## Example

Mia's Bakery Ltd starts its first PAYE scheme in July 2026 with five staff. It ticks the Employment Allowance box in its payroll in the first month. Its employer NIC is about £1,400 a month, so the £10,500 allowance covers the first seven months and the company starts paying NIC in February 2027.

## Check connected companies

Companies are connected if one controls the other or a single person controls both. Only one company in the connected group can claim the allowance. Choose the one with the highest NIC bill to make sure you use all of it.

## Records

Keep evidence of your eligibility, such as staff lists and payroll reports, as HMRC can check claims.

## Employer NIC in 2026/27

Employer NIC is 15% on earnings above the Secondary Threshold of £5,000 a year. Because the threshold is low, even a small business with a few part-time staff usually pays enough NIC to benefit from the allowance. The allowance can't reduce Class 1A NIC on benefits in kind, or employee NIC deducted from pay.

## Frequently asked questions

### Can a sole trader claim?

Yes, if they have employees.

### What happens if I don't use it all?

Unused amounts are lost, though you can claim for earlier years.

### Does the allowance reduce employee NIC?

No, only employer NIC.

### Do I need to claim every year?

Payroll software usually carries it forward, but check.

Related: [how much NI you pay for each employee](https://accotax.co.uk/knowledgebank/how-much-ni-will-i-have-to-pay-for-each-employee-from-april-2011/), [employing family members](https://accotax.co.uk/knowledgebank/can-employing-a-family-member-save-tax/) and [cheap loans for employees](https://accotax.co.uk/knowledgebank/helping-employees-with-cheap-loans/).

## Talk to Accotax

Want this handled for you? Our team at [Accotax](https://accotax.co.uk/) can help with payroll and Employment Allowance. See our [small business accountants](https://accotax.co.uk/accountants-for-small-businesses/) service, or [contact us](https://accotax.co.uk/contact/) for a free, no-obligation quote.

This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.