The Employment Allowance is a government scheme that lets eligible businesses reduce their annual National Insurance liability by up to £10,500 (for the 2025/26 tax year). But there are a few key rules around eligibility-especially when it comes to company directors. Here’s the crux of it: To claim the Employment Allowance, your business must have at least one employee (or director) who is paid above the Secondary Threshold for Class 1 National Insurance (that’s £5,000 per year in 2025/26). Now, here’s where it gets interesting in the scenario of company director only payroll: You’ve got two directors on the payroll,
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