New tax cuts for employers of Veterans
A National Insurance contributions (NICs) holiday for businesses who employ armed forces veterans came into effect from 6th April 2021 and can be backdated.
The policy allows employers to claim National Insurance contributions’ relief for veterans they’ve hired during their first year of civilian employment after leaving the armed forces.
The relief is available to all employers of veterans regardless of when the veteran left the regular armed forces, as long as it’s their first civilian job after leaving service. The relief will be available on all qualifying veterans each time they leave HM Armed Forces.
Employers will 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.
Employers can claim relief even if the employment starts before the 6th April 2021, but will only be able to claim for the remaining qualifying period. The scheme lasts for 12 months per veteran hired.
- 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.
The move is part of the government’s commitment to make the UK the best place in the world to be a veteran and will help further incentivise employers to take advantage of the wide range of skills and experience that ex-military personnel offer.
Chancellor Rishi Sunak said: ‘We will always support our veterans, who have risked their own lives to keep our country safe, and this tax cut will give them a crucial helping hand getting them into the workplace after leaving service.’
FSB national chairman Mike Cherry said: ‘This is a loud and clear declaration of support for veterans employment and it’s fantastic to see this announcement.
‘Service leavers have a huge amount to offer civilian employers, and we’d urge every small employer to consider the value this relief can bring in helping them take on a new member of staff.
‘We’ve been pleased to work with government and ex-forces on this relief, giving a helping hand to firms supporting service leavers and boosting job opportunities at this admittedly difficult time for businesses.’
Business News
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