HMRC launch consultation on NIC holiday for veterans
Newsletter issue - September 2020.
The Government currently provides a career transition package to service personnel leaving the Armed Forces which supports around 86% into employment. However, 6% of veterans using the service remain unemployed up to a year after leaving. The Government made a manifesto pledge to back veterans, by scrapping employer National Insurance Contributions (NICs) for a full year for every new employee who has left the Armed Forces. This policy is now being developed and is expected to take effect from April 2021.
HMRC have launched a consultation entitled Supporting veterans' transition to civilian life through employment, which examines the NIC holiday for veterans announced at Spring Budget 2020. The consultation seeks views on a range of issues and, where appropriate, the Government's preferred approach to the design and implementation of the policy. The consultation runs until 5 October 2020.
Broadly, the new measure will introduce a Secondary Class 1 employer NICs relief on the wages of veterans for the first 12 months of their civilian employment and will be available to employers from April 2021.
To claim back the employer NICs paid on the salaries of eligible veterans employed between April 2021 and March 2022, employers will be able to make a claim to HMRC from April 2022. From this point onwards, employers will be able to claim the relief in real time through PAYE.
Further information can be found at https://www.gov.uk/government/consultations/supporting-veterans-transition-to-civilian-life-through-employment.