Freeports Employer NICs Relief (FENR)

HM Revenue & Customs Software Developers Support Team (SDST) has issued briefing notes for developers in relation to changes for the April 2022 introduction of Freeports Employer NICs Relief (FENR).

The relief applies from April 2021, however HMRC were unable to ready their systems in time for real time operations and employers will be expected to pay NICs as normal and undertake a reclaim process for the 2021/2022 tax year.

For the 2022/2023 tax year a new NIC category letters ‘F’, ‘I’, ‘S’ and ‘L’ are introduced.

Initial analysis of the requirements indicates that payroll software is likely to require the following:

1 – The acceptance of the new NIC category letters F, I, S and L

2 – Application of a new Freeport Upper Secondary Threshold (FUST) – this is expected to be different to the other type of Upper Secondary Threshold that already exist (including the Veterans).

3 – An understanding that the NIC relief only applied to new employment from 6th April 2022 and onwards and lasts for 3 years. On the 3rd Anniversary the concession ends and the employee will need to be transferred to the relevant standard NIC letter for their age and circumstance such as NIC Letter A and the NIC holiday ends, employer contributions then commence on all earnings above the secondary threshold.


It is good that the HMRC SDST has obtained information from the relevant HMRC policy areas to provide some detail to software developers and employers on the business process requirements. Although there are many unanswered questions, at least planning for the change can now commence.

There are still gaps in the design.

The resulting changes to electronic exchange requirements of the Full Payment Submission (FPS) should be made available shortly.

PAYadvice.UK 4/8/2021

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