Tax Relief for Ex-Army Employees: What You Need to Know

Q: We have just offered a job to someone who is ex-Army. She has just left and this is her first job outside the Armed Forces. She mentioned that there may be a relevant tax relief for us to consider, but I hadn’t come across this before. Can you clarify what that would be?

A: It’s true that in hiring a veteran there is a tax implication to consider – but a good one! Your new recruit will be referring to the fact that businesses who employ former UK Armed Forces personnel, who are entering their first job in civilian employment, can apply zero-rate of secondary National Insurance contributions (for that employee) for up to 12 months. To ensure the veteran qualifies for the NI relief, you must only double check these two points. They must have:

  • served at least one day in the regular armed forces
  • completed at least one day of basic training

The way you need to claim the relief is by submitting a revised Final Payment Submission (FPS) using National Insurance category letter V for qualifying veteran employees.  The relief only applies to the part of the employee’s earnings below the veterans upper secondary threshold.

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