Employers hiring military veterans can, from today, qualify for relief on national insurance contributions (NICs) for the first 12 months of employment.
Organisations will be able to claim relief on the earnings of veterans who have served at least one day in the regular armed forces, including anyone who has completed at least one day of basic training.
Recruiting armed forces veterans
Relief is available regardless of when the veteran left the armed forces, providing they have not been previously employed in a civilian capacity.
Speaking to the Telegraph, veterans minister Johnny Mercer said: “The government is delivering on its manifesto commitment to further incentivise employers to make use of the immense skills and talent that veterans have to offer.”
He added: “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.”
Relief is available for any civilian employment, including roles with organisations that may have strong links to the armed forces, such as the Ministry of Defence or NATO. Employment with a reserve organisation would however not qualify.
Self-employed individuals do not pay Class 1 national insurance contributions and therefore do not qualify for relief.
Relief applies on earnings up to the upper secondary NIC threshold. If a veterans earn above this, employers can apply the relief on the part of the earnings below the threshold. This approach is in line with existing relief schemes for under-21s and apprentices under 25.
Employers will be able to claim the relief for the 2021/22 tax year from April 2022. From 2022/23, relief can be applied in real time through PAYE. The government has said it intends to review whether or not to extend this policy on employer NICs for forces veterans beyond April 2024.
In 2019 the government established the Office for Veterans’ Affairs. Since then it has brought in the Veterans Railcard, launched the ‘Op Courage’ mental health and wellbeing service, and introduced a pilot scheme for veterans applying for civil service jobs.
HM Revenue and Customs has published full details of national insurance contributions relief for employers who hire veterans online.
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