06 May NICs relief for employing Armed Forces Veterans
From 6th April 2021, there is another reason that employing Armed Forces Veterans makes good business sense. Employers can claim NICs relief for employing Armed Forces Veterans for up to the first 12 months of a Veteran’s employment with you. For year 21/22, you will pay NICs as normal. Then in April 2022, you can claim a rebate that will be credited to their PAYE account. From April 2022 onwards, you can claim relief back in real time through normal PAYE processes.
This NICs relief is applicable for any Veteran where your employment is their first “civilian” employment since leaving the military. This is primarily aimed at service leavers. As such, it isn’t available to anyone employing a Veteran who has been employed by a civilian organisation for 12 months or more since leaving the Armed Forces.
The NICs relief for employing Armed Forces Veterans is available on earnings up to the Upper Secondary Threshold (UST) This could save an employer up to £5,500. This is in line with other reliefs for apprentices and those aged under 21. Even if employment started before 6 April 2021, you can still claim for the period from then, provided the other qualifying criteria are met. It’s important to note that this isn’t classed as an exemption but a zero rate instead.
Although complicated, the 12 month eligibility period applies to the Veteran, not the employer. So if the Veteran is employed in a series of short contracts with different organisations, then you can claim the NICs relief for whatever part of the 12 month qualifying period covers employment with you.
To claim the relief, you will need to ensure that an individual is indeed a Veteran. Moreover, you need to ascertain that their employment with you is the first they have had since leaving the military and/or is within the first 12 months of them leaving military service.
In terms of determining a Veteran’s status, you could ask to see originals of the following documents:
- 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
Alongside their unique experience and excellent skills, this tax relief is designed to incentivise employers to recruit Armed Forces service leavers to support their transition into civilian lives. To find out more about how employing an Armed Forces Veteran could benefit your business or to talk though how you could recruit a Veteran into your organisation, drop us an email or give us a call. For more detail on the scheme, please see the .Gov website.