Posted by tinamitchell - June 16, 2021 11:12 am
Veteran National Insurance Contribution (NIC) relief for Employers
From 6 April 2021, employers are able to claim NIC relief on the earnings of veterans who qualify during their first year of employment as a civilian.
To qualify, the veteran must be someone who has served at least one day in the regular armed forces, including at least one day of basic training. Relief is only available for civilian employment and not if they are employed as part of the armed forces or organisations associated with the armed forces. Self-employed businesses will also not qualify for relief, as they do not pay Class 1 NICs.
How long with the relief last?
This relief will initially be available for 3 years (until the 2023-24 tax year), but HMRC may extend this at a later date.
Initially, for the first year, employers will be expected to pay the Class 1 NICs in the normal way and then claim this back from HMRC in April 2022. HMRC will publish guidance on how to submit claims at a later date and it is expected that from April 2022, that there will be a Real Time Information solution in place so that the NIC relief will apply automatically as opposed to having to wait until after the end of the tax year.
Supporting your claim
As an employer, the onus will be on you to ensure you have records to support your claim. You will need to ensure you hold documentation to show the start date of the veterans first civilian employment (which may be for a previous employment) and that they are a qualifying veteran. Documents should be kept for a minimum of 3 years after the tax year they relate to.
Rules to adhere to
There are of course some rules that must be adhered to when claiming the relief and some of these include the following:
- relief only applies up to the Upper Secondary Threshold (UST)
- relief is only available for 12 consecutive months from the veterans first day of employment
- relief can be claimed on employments that started before 6 April 2021, but can only be claimed for the remaining qualifying period. For example, for a veteran who started their employment on 1 January 2021, you would be able to claim relief for the period 6 April 2021 to 31 December 2021. Where an employment ends before the first 12 months of the veteran’s employment, subsequent employments can claim the remaining time up to the 12 month point.
Further guidance can be found at the following link:
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