From 6th April 2021 employers who take on veterans, will be entitled to claim a National Insurance contributions (NICs) relief.
Qualifying veterans are those having served at least one day in the regular armed forces (including basic training) and who have not previously been employed in a civilian capacity.
Claiming veteran employers NIC relief
The relief, which can be applied up to the Upper Secondary Threshold, is available for 12 consecutive months from the day that the veterans first civilian employment commenced (known as the qualifying period).
From April 2021 to March 2022, employers must continue to pay the relevant Class 1 NI contributions as normal, and then they will be able to claim it back retrospectively.
From March 2022 onwards, the Government’s intention is to have a real-time solution in place whereby the relief can be operated via PAYE.
Employers can still claim for veterans who commenced employment prior to April 2021, and meet all other criteria, but claims will be time apportioned.
Importantly, a veteran’s qualifying period does not expire sooner if their first civilian employment finishes before the end of the 12 months.
Therefore, both current and future employers may be able to claim the relief but must ensure any veteran is still within their qualifying period before any claims are made.
Employers should also note that the relief is not an exemption of secondary NIC but a zero rating, which means it is included in calculations for the apprenticeship levy.
Record-keeping responsibilities
Employers will be responsible for confirming a veteran’s eligibility and recording the start date of their civilian employment. To do so, employers may request certain documentation from a veteran. A list of documents that may confirm qualification can be found on the GOV.UK website here.
Records must also be maintained that demonstrate the employee’s eligibility for the relief, for at least three years after the end of the tax year to which they relate.
How can GH Payscheme help?
At GH Payscheme, calculating NI contributions is just one of the things we can do for you when processing your payroll.
With years of experience and specialist knowledge, our dedicated payroll bureau – operating from our Biggleswade office, but servicing Bedfordshire, Cambridgeshire, Hertfordshire and beyond, can ensure your staff are paid correctly and on time, and that you are compliant with your legal obligations as an employer.
To discuss your requirements in more detail, with one of our friendly payroll professionals, contact us today.
