Employers can now get National Insurance Relief when hiring Veterans

Date: 07/04/22

Employers can now get National Insurance Relief when hiring Veterans

From 6 April 2022, employers hiring veterans in their first year of civilian employment after leaving the armed forces will not have to pay Employer Class 1 National Insurance contributions for 12 (consecutive) months. The Government’s Office of Veterans’ Affairs scheme was launched in April 2021. However, the relief has only just been made available to claim from April 2022 (including retrospective claims back to April 2021).

Employers will now be able to apply the relief in real-time through PAYE from April 2022 onwards. For any employment which began from April 2021, employers will be able to retrospectively claim any Employer Class 1 National Insurance paid in the last 12 months.

 

Who qualifies?

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 relief is available to all employers of veterans regardless of when the veteran left the regular armed forces, providing they have not previously been employed in a civilian capacity.

 

Qualifying employments

Relief is available for any civilian employment. A civilian employment is one that is not part of the armed forces and includes employment with organisations that may have strong links to HM Armed Forces, such as the Ministry of Defence or NATO.

 

Other conditions

Employers can claim relief if they employ a veteran during the qualifying period. 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.

Employers can claim relief even if the employment starts before 6 April 2021, but will only be able to claim for the remaining qualifying period i.e. from 6 April 2021.

The first day of employment will be the start date taken from the employment contract between the employer and the employee.

The 12 month period does not change if the employment finishes. This means that current and future employers can also claim this relief if they employ a veteran within their qualifying period.

 

Claiming the relief

To claim relief, employers will need to have taken reasonable care to confirm the veteran’s eligibility and confirm, if applicable, the start date of the veteran’s first civilian employment.

An employer can request any of the following documents during onboarding, to confirm that the veteran qualifies:

  • veteran’s Identification card (which marks their time in the armed forces)
  • letter of employment or contract with HM Armed Forces
  • veteran’s P45 from leaving HM Armed Forces
  • discharge papers from HM Armed Forces
  • the employment contract of an individual’s previous employment (in order to determine the start date)

From April 2021 to March 2022, employers will have paid the associated secondary Class 1 Employers National Insurance contributions.

From April 2022, employers can now claim back the associated National Insurance contributions that were paid between April 2021 and March 2022. Employers will need to keep records that demonstrate they are eligible for relief for those periods.

From April 2022 onwards, employers are able to apply the relief in real-time through PAYE.


James Cornthwaite FCA CTA

Author: James Cornthwaite FCA CTA

A former pupil at St Aidan’s C of E High School, James attended Blackpool Sixth Form College and Lancaster University, graduating in 2004, gaining BSc. first class honours. He joined Moore and Smalley, Preston in 2005 and qualified as a...

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