In April 2021 HMRC introduced a zero rate of employers Class 1 National Insurance contributions on the earnings of a qualifying veteran. The relief is not an exemption of secondary NIC but a zero rating, which means it is included in calculations for the apprenticeship levy.

If you employ former UK military personnel you can claim relief on secondary national insurance contributions (NIC) for the first 12 months of a veteran’s civilian employment.

The 12-month relief period starts on the veteran’s first day of civilian employment regardless of when they left the regular armed forces and subsequent employers will have to confirm this date to make their claim.

The relief is available for any former member of the regular armed service (Army, Royal Navy or Royal Air Force). A veteran is defined as anyone who has completed one day of employment in the armed services and includes those who completed at least one day of basic training.

The relief only applies to earnings up to the secondary threshold. Earnings over this threshold will attract NIC at the usual rates.

The relief is also available where a veteran has concurrent employments, (ie, more than one job at any one time), as well as for consecutive jobs within the 12-month timeframe.

This means that where an employee:

• has more than one job each employer can claim the relief at the same time for the same employee
• ceases one employment and starts another, the subsequent employer can claim the relief until the end of the qualifying period, but the employer will need to find out the date when the veteran was first employed

Businesses can claim this relief retrospectively for any qualifying employees who joined their business in the last 12 months.

You’ll be able to apply the relief in real time by using National Insurance category letter V for qualifying veteran employees.