The next step

Further information about National Insurance contributions relief for employers who hire veterans

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Hire an armed forces veteran, save up to £5,500!

Government manifesto

As part of its commitment to help Armed Forces veterans obtain civilian employment, the government has introduced a new employers’ NI relief scheme (see The next step ).

Under the scheme, which went live on 6 April 2021 , you can claim full employers’ NI relief - or a holiday - on the earnings of all qualifying Armed Forces veterans that you hire up to the upper secondary threshold (UST).

Earnings in excess of the UST attract the usual employers’ NI of 13.8%.

Twelve months

This employers’ NI holiday commences on the first day of the veteran’s employment - which is taken as being the start date in their employment contract - and it lasts for twelve consecutive months from that same date.

If you employ an Armed Forces veteran on, say, 1 July 2021, the twelve months of employers’ NI relief would be available until 30 June 2022.

Tip. Where the twelve-month holiday is utilised in full, this would equate to a saving for you in excess of £5,500 per veteran employed.

The claims process

From April 2021 to March 2022 you must pay the associated NI as normal and then claim the relief afterwards.

From April 2022 onwards, you’ll be able to apply for this relief in real time through PAYE.

Already employed

If you have hired an Armed Forces veteran prior to 6 April 2021, you can claim a proportion of the employers’ NI relief for the period that is still available. For example, if by that date the veteran had six months’ employment with you, six months’ relief remains available.

Who is eligible?

A person qualifies as a veteran for this scheme if they have served at least one day in the regular Armed Forces. This includes anyone who has completed at least one day of basic training.

All employers of veterans can use the scheme regardless of when the veteran left the regular Armed Forces, but the veteran can’t previously have been employed in any civilian capacity.

Qualifying employment

Relief is available for any type of civilian employment. This means any employment that is not part of the Armed Forces.

Self-employed individuals don’t qualify for this relief and self-employed work does not trigger the qualifying period.

Tip. The twelve-month holiday period doesn’t end if employment finishes before that point. Future employers can also claim this relief if they employ the veteran within their qualifying period.

For further information about National Insurance contributions relief for employers who hire veterans, visit https://www.tips-and-advice.co.uk , Download Zone, year 23, issue 09.