Employers of “illegal workers” may face one year ban on claiming Employment Allowance

15 Nov 2016

HM Revenue & Customs has commenced a period of consultation which will end on 3 January 2017, seeking views on draft regulations to exclude employers from claiming Employment Allowance for one year, if they have been found to have employed “illegal workers”.

The draft regulations propose to exclude employers from claiming the allowance, where:

  • the employer employed individuals subject to immigration control;
  • the employer has been issued a civil penalty by the Home Office; and
  • any appeal process against that penalty has been exhausted.

Employment Allowance can reduce an organisation’s employers’ (secondary) Class 1 national insurance bill by up to £3,000 per year, which amounts to 15% of the current maximum civil penalty per illegal worker of £20,000. Therefore, for some employers, this would be a significant further incentive to ensure that correct right to work checks are undertaken throughout the workforce, and that a robust system for identifying and addressing apparent right to work issues is in place.

For advice and support on carrying out right to work checks, or on any other business immigration issue, please contact:

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