MY CIPP
The CIPP's Advisory Service team provides answers to popular questions
Veteran NI relief Q: Please see several questions about the veteran National Insurance (NI) relief below: 1. How should an employer determine if an employee is a veteran, and what records should be kept? 2. How would an employer know if the one year’s entitlement to the veteran’s relief had been exhausted? 3. What would be the impact on veteran NI contributions (NICs) if they had two separate concurrent employments? A: During the onboarding process, employers can request any of the following documents to show the veteran qualifies: ● a veteran’s identification card (which marks their time in HM Armed Forces) ● a letter of employment or contract with HM Armed Forces ● veteran’s P45 from leaving HM Armed Forces ● discharge papers from HM Armed Forces ● the employment contract of their previous employment (to determine the first civilian employment start date). Records showing the employee’s eligibility for the relief need to be kept for a minimum of three years after the end of the tax year to which they relate. Employers can claim relief if they employ a veteran during the qualifying period, which commences with the veteran’s first civilian employment since leaving HM Armed Forces and ends
business expenses, they would like to pay a £80 daily allowance as a per-diem. We understand this is within the tax-free allowance for pilots, but what items can be claimed, and what records must be kept? Are receipts for items purchased kept, as our understanding is that they are not required? A: Airline pilots are entitled to a flat rate expense (FRE) of £1,022 to cover business expenditure. This FRE doesn’t include the cost of travelling expenses, uniforms and noise-cancelling headsets. The items covered within the FRE are confirmed in guidance from Her Majesty’s Revenue and Customs (HMRC). If pilots wish to claim for uniforms and headsets not provided by their employer, they can, in addition to the FRE, but the expense must be supported by a receipt. Records must also be kept, as with all other business-related expenditure. For reference, see: https://bit.ly/3KXqKwP and https://bit. ly/3oyUuqr. Self-employed NI thresholds and rates Q: Will NI thresholds and rates for class 2 and class 4 for the self-employed change in April 2022? A: There is a 1.25 percentage point increase to class 4 NICs, but not for class 2 NICs. For reference, see: https://bit. ly/3HgiaqB and https://bit.ly/3KZWcus.
12 months later. The 12-month period doesn’t change if the employment finishes. Therefore, current, and future employers can also claim this relief if they employ a veteran within their qualifying period. Subsequent employers must determine what the first day of the veteran’s first civilian employment was, and confirm the veteran is employed within their business during the qualifying period. A veteran may have two separate employments, but the NI relief would still apply, providing the employments took place during the qualifying period i.e., the first 12 months since leaving HM Armed Forces. For reference, see: https://bit. ly/35COkPk.
What business expenses can be reclaimed for pilots, and what are the record-keeping requirements? Expenses for pilots Q: My client provides payroll services for an aviation company. The pilots travel the world. Instead of reimbursing
| Professional in Payroll, Pensions and Reward | March 2022 | Issue 78 6
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