Veterans tax relief a “win-win for businesses and veterans”

Employers hiring military veterans can, from now qualify for relief on national insurance contributions (NICs) for the first 12 months of employment.

Speaking to the Telegraph, veterans minister Johnny Mercer said:

“This is a win-win for businesses and veterans. Employers can take advantage of the tax relief, while also bringing on board immensely talented individuals who have served their country. Veterans will see greater employment opportunities, allowing them to further their careers outside of the armed forces.

Think you might benefit? Here’s everything you need to know.

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.

Which types of employment qualify?

Relief is available for any civilian employment. A civilian employment is one that is not part of the armed forces, and includes employments with organisations that may have strong links to HM Armed Forces, such as the Ministry of Defence or NATO. Employment with a reserve organisation is not considered as civilian for the purpose of this relief and do not trigger the qualifying period (outlined below).

Self-employed individuals do not pay Class 1 National Insurance contributions. Therefore, self-employed businesses do not qualify for this relief.

How can I claim?

Relief was made available from 6 April 2021.

From April 2021 to March 2022, you will need to pay the associated secondary Class 1 Employers National Insurance contributions.

Then, from April 2022, you will be able to claim back the associate National Insurance contributions that would have otherwise been relieved. You will need to keep records that demonstrate they are eligible for relief for those periods. Further details on this process will be published before April 2022.

From April 2022 onwards, HMRC will put measures in place to enable employers to apply the relief through PAYE. Find more details on how to claim here.