National Insurance contributions relief for employers who hire veterans

At Spring Budget 2020, the Chancellor announced the introduction of a National Insurance holiday for employers that hire former members of the UK regular armed forces. The holiday will exempt employers from any National Insurance contributions liability on a veteran’s salary up to the Upper Secondary Threshold (UST) in their first year of civilian employment.

This relief is available from April 2021. From April 2021 to March 2022, employers will need to pay the associated secondary Class 1 National Insurance contributions as normal and then claim it back retrospectively from April 2022 onwards.

A full digital service will be available to employers from April 2022; however, transitional arrangements will be in place in the 2021 to 2022 tax year which will effectively enable employers of veterans to record details of veterans’ employments to then claim the holiday relief from April 2022.

The government published a policy consultation on the design of this relief on 21 July 2020, which concluded on 5 October 2020. Draft legislation for this measure has been published for a technical consultation. This is currently open and will close on 8 March 2021.

PAYadvice.UK 10/2/2021 updated 20/2/2021

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