Payroll Legislation

National Insurance holiday for employers of veterans

Legislation

National Insurance holiday for employers of veterans

Due Date

April 2022

Summary

From 6 April 2021 employers who hire 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 National Insurance contributions for up to 12 months. Any earnings of qualifying veterans hired from 6 April 2021 will be eligible for retrospective National Insurance contributions relief.

Employers must continue to pay National Insurance contributions as normal until April 2022. At this point employers will be able to claim back any National Insurance contributions qualifying for relief, through a revised Full Payment Submission showing the new National Insurance category letter ‘V’.

Employers whose software does not support this functionality can write to HMRC to request the relief. Currently the Moorepay system does not support this functionality, and further information on this process will be published on GOV.UK, we’ll update Moorepay customers in due course.

For tax years 2022 to 2023 onwards, employers will be able to apply the relief through real time information as normal by using National Insurance category letter ‘V’. Employers must ensure that they keep records showing that they have hired a qualifying veteran (such as veterans ID card, discharge papers, or P45 from HM Armed Forces).

  • A person qualifies as a veteran 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.
  • The qualifying period starts on the first day of the veteran’s first civilian employment since leaving the regular armed forces and ends 12 months later.
  • This 12-month period is set and does not change if an employment ceases.

The table below provides examples for veteran NIC savings for employers for each month for 2022-23.

 ​Weekly​Monthly​Annual​
Lower Earnings Limit (LEL)​£123​£533​£6,396​
Primary Earnings Threshold (PT)​£190​£823​£9,880​
Secondary Earnings Threshold (ST)​£175​£758​£9,100​
FUST​£481​£2,083​£25,000​
Upper Earning Limit (UEL)​£967​£4,189​£50,270​

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