NIC holiday for employers of veterans
From 6 April 2021, employers hiring former members of the UK regular armed forces during the first year of their civilian employment will be eligible for a zero-rate of secondary (Employer) National Insurance contributions. This National Insurance holiday applies to earnings up to the upper secondary threshold (currently £4,189 per month) for the first 12 months of the veteran’s employment.
This represents a potential NIC saving for companies of approximately £5,000 per veteran.
For the 2021/22 tax year, employers can claim back any NICs already paid and which qualify for the relief, by submitting a revised Full Payment Submission (FPS) or by writing to HMRC.
From April 2023 onwards, employers will be able to apply the relief through real time information, by using National Insurance category letter ‘V’. Employers will need to keep records showing they have hired a qualifying veteran (such as a veteran’s ID card, discharge papers, or P45 from HM Armed Forces).
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