ICAEW.com works better with JavaScript enabled.

TAX NEWS

HMRC reminds businesses that hire veterans to claim national insurance relief

Article

Published: 11 Apr 2022 Update History

Employers do not have to pay national insurance contributions for veterans in their first year of civilian employment after leaving the armed forces.

Class 1 secondary (employer’s) national insurance contributions relief has been available for businesses hiring veterans since 6 April 2021 and applies up to the veteran’s upper secondary threshold of £50,270 per year.

Claims can now be made to recover the secondary NIC paid for qualifying veterans in the 2021/22 tax year. This can be done through payroll reporting, if the employee previously had national insurance category A applied. An employer needs to submit a revised final payment submission (FPS) after 6 April 2022, using national insurance category letter V (if the payroll software allows). Otherwise, claims must be submitted by employers to HMRC in writing.

For 2022/23 onwards, the relief can be applied in real time by using national Insurance category letter V for qualifying veteran employees.

A qualifying veteran must have either:

  • served at least one day in the regular armed forces; or
  • completed at least one day of basic training.

The relief is available for a year from the date a veteran starts their first civilian job, regardless of when they left the regular armed forces.

More than one employer can claim relief for the same employee where the employee has more than one job. If the employee leaves a job and starts another within the first year, the subsequent employer can also claim for the remainder of the employee’s first year of civilian employment.

Find out more:

 

 
Tax Faculty

This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.

More support on tax

ICAEW's Tax Faculty provides technical guidance and practical support on tax practice and policy. You can sign up to the Tax Faculty's free enewsletter (TAXwire) which provides weekly updates on developments in tax.

Sign up for TAXwireJoin the Tax Faculty

More from the Tax Faculty

Latest news
Making tax digital image
TAXwire

Stay up to date with the latest developments in tax by signing up to the Tax Faculty's weekly e-newsletter

Practical guidance
Cover
TAXline

Comprehensive support for Tax practitioners each month from the Tax Faculty and expert contributors.

Technical support
Tax Faculty image
Webinars

Expert advice from the Tax Faculty's technical managers on all the developments in tax policy and practice.

Open AddCPD icon

Add Verified CPD Activity

Introducing AddCPD, a new way to record your CPD activities!

Log in to start using the AddCPD tool. Available only to ICAEW members.

Add this page to your CPD activity

Step 1 of 3
Download recorded
Download not recorded

Please download the related document if you wish to add this activity to your record

What time are you claiming for this activity?
Mandatory fields

Add this page to your CPD activity

Step 2 of 3
Mandatory field

Add activity to my record

Step 3 of 3
Mandatory field

Activity added

An error has occurred
Please try again

If the problem persists please contact our helpline on +44 (0)1908 248 250