Employers will be eligible for relief on the earnings of the veteran’s earnings from 6 July 2021 until 5 July 2022 or when the employment ceases (whichever comes first).
The employer will need to pay the associated secondary Class 1 Employers National Insurance contributions until April 2022.
If the employment ceases on 1 November 2021, the employer notes the employment end date on their local records and claim this relief in April 2022 (for the period 6 July 2021 to 1 November 2021).
Example two
Veteran B leaves HM Armed Forces on 1 February 2021.
Veteran B starts first civilian employment on 30 June 2021.
The employer confirms that the veteran qualifies. They will then clerically record 30 June 2021 as the start date of employment (this date is also the start of the veteran’s 12-month qualifying period).
The employer will need to pay any associated secondary Class 1 Employer National Insurance contributions until April 2022.
The veteran stays in this employment indefinitely. In April 2022, the employer will claim the relief for the period 30 June 2021 to 5 April 2022 and start applying the relief through PAYE from 6 April 2022 until 29 June 2022.
Example three
Veteran C leaves HM Armed Forces on 1 August 2021.
Veteran C starts their first civilian employment on 30 August 2021.
Employer A confirms that the veteran qualifies and will record 30 August 2021 as the employment start date (this date is also the start of the veteran’s 12-month qualifying period).
The employer will need to pay the associated secondary Class 1 Employer National Insurance contributions until April 2022.
On 30 November, Veteran C enters into an employment with Employer B. Employer B needs to establish that they are a qualifying veteran and determine the start date of Veteran C’s first day of civilian employment (in this scenario, with Employer A). Employer B can then claim this relief until 29 August 2022.
Record keeping
Employers must check and retain records that show that an individual is a qualifying veteran, and the start date of the veteran’s first civilian employment.
In order to claim relief, employers will need to demonstrate that they took reasonable care to confirm the veteran’s eligibility and must be able to confirm, where applicable, the start date of the veteran’s first civilian employment. An employer can request any of the following documents during the onboarding process, to show that the veteran qualifies: • Veteran’s Identification card (which marks their time in the armed forces) • 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 an individual’s previous employment (in order to determine the start date)
Records will need to be retained that show the employee’s eligibility for the relief for a minimum of three years after the end of the tax year to which they relate.
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The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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