Employment Allowance 16/17 – what does it mean to a sole director of a limited company?

As mentioned in a previous blog, there are a few changes to the Employment Allowance this year (2016/17), that you need to take note of:

  1. The allowance has increased from £2,000 to £3,000
  2. Eligibility – one of the main changes is if you are the directors and only paid employee, you are no longer eligibility

 So what does this mean if you are a sole director and the only paid employee?

Simply put, you are no longer entitled to receive the allowance and this in turn will effect what is the most tax-efficient way to pay yourself – see our post on As a director what should I pay myself in 2016-17?