Answers · UK 2025/26
Who qualifies for the Employment Allowance in 2026/27?
Most UK employers qualify for the £10,500 Employment Allowance, except companies where the sole employee is also a director.
Full answer
The Employment Allowance of £10,500 for 2026/27 offsets an eligible employer's secondary (employer) Class 1 NI liability. To qualify, employers must have a Class 1 NI liability of less than £100,000 in the prior tax year. Employers who do NOT qualify include: companies where the only employee is also a director (unless a second employee works and earns above the secondary threshold), personal service companies with only the PSC worker-director, and domestic employers (nannies, gardeners). Connected companies (under common control) share a single £10,500 allowance between them -- they cannot each claim. The allowance is claimed through payroll software; it does not need separate HMRC application.
This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.