As part of the 2020 budget, the government announced an employer National Insurance holiday for those employing veterans in their first year of civil employment. This was re-confirmed in the 2021 budget and went live for employers in April this year. Also in this year’s budget, the government announced a further NI holiday, this time for the newly announced UK Freeports from April 2022. Both schemes work in a similar way where an employer of a veteran or employing a new member of staff in a Freeport area will be able to reduce their NI contributions for those individuals that qualify up to the Upper Secondary Threshold. In this first year, there has been no changes or systems for employers to make the claim or reduction and as such all changes will be ongoing and retrospective from the 2022 tax year. This week however, details of that reclaim have been confirmed.
The claims for veterans will be via RTI through a new NIC letter which has been confirmed as V. If however they already come under a different letter to A, such as B, T, C, W, J, Q then this existing letter will apply for the tax year and override the veterans category and employers eligible for the reclaim will need to contact HMRC at the end of the tax year and manage the amount manually.
Freeports will be a similar model but with an NI category of F and both will have a new Upper threshold.
Further detail and eligibility can be found here
