National Insurance contributions relief for employers who hire veterans

From April 2021, employers who hire former members of the UK armed forces will benefit from a National Insurance holiday.

This relief is only available for 12 consecutive months from the veteran’s first day of civilian employment. This zero-rate can be applied up to the upper secondary threshold.

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. From April 2022 onwards, employers will be able to apply the relief in real time through PAYE.

Further information on how employers will be able to claim it back will be published before April 2022.

Who qualifies

Employers will only be able to claim National Insurance contributions relief on the earnings of qualifying veterans. 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.

The relief is available to all employers of veterans regardless of when the veteran left the regular armed forces, providing they have not previously been employed in a civilian capacity.

Employments that 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. In addition, self-employed work does not trigger the qualifying period.

Click here for more information.