How Does Employment Allowance Work for Connected Companies?
What you need to know if your business is part of a group or has shared control
If your business is part of a group of companies or has shared ownership or control with another company, special rules apply to claiming Employment Allowance.
🧾 What Are “Connected Companies”?
Connected companies are businesses that are:
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Controlled by the same person or group of people
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Part of a company group with shared directors or ownership
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Linked through common business interests (as defined by HMRC)
These companies are treated as one employer for the purposes of Employment Allowance.
✅ What You Can Claim
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Only one company in the group can claim Employment Allowance in any given tax year
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The chosen company must meet all the usual eligibility criteria
If more than one company in your group applies, HMRC may reject or reclaim the allowance unless it’s been correctly assigned.
📋 What You Should Do
If your company is connected to others:
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Check group eligibility using HMRC guidance
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Designate one company to make the claim for the current tax year
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Keep internal records of the decision, in case HMRC asks for justification
💬 If you’re unsure which company should claim:
Contact us here — we’ll help you assess your structure.
📎 HMRC Guidance
You can review the official HMRC rules for connected companies here:
👉 HMRC: Connected Companies and Employment Allowance