Last updated: 14 October 2026
How does National Insurance relief for employing veterans work?
If you employ someone who has left the regular armed forces, you pay no employer National Insurance on their earnings up to £50,270 a year for the first 12 months of their first civilian job since leaving. The relief has been extended to 5 April 2028. With employer NIC at 15% on earnings above £5,000, it can save up to about £6,790 per veteran in a year. You claim it through payroll using National Insurance category letter V.
Who qualifies
| Condition | Detail |
| Served in the regular armed forces | At least one day, including completing basic training |
| First civilian employment since leaving | Relief runs for 12 months from the start date of that job |
| Earnings up to £50,270 a year | Relief applies up to the Veterans Upper Secondary Threshold |
| Earnings paid by 5 April 2028 | Relief currently ends on that date |
Reservists’ service on its own doesn’t qualify. The veteran’s first civilian employer gets the relief, and if they move on within 12 months, a later employer can claim for the rest of that period.
How to claim
- Ask new employees whether they’ve served in the regular forces, and get evidence such as a discharge certificate or service leaver’s pack.
2. Confirm it’s their first civilian employment since leaving, and the start date.
3. Use category letter V in payroll for 12 months from that date.
4. Keep records in case HMRC asks.
Employees’ own NIC is unaffected; they pay the normal rates.
Example
A logistics company hires a veteran on £38,000 a year in May 2026. Normally, the employer NIC would be 15% of £33,000 (£38,000 less the £5,000 secondary threshold), which is £4,950. Using category letter V for the first 12 months, the company pays nothing. After 12 months, it moves the employee to category A.
Other employer reliefs
| Relief | Who it covers |
| Employment Allowance | Up to £10,500 off the employer NIC bill a year, for most employers |
| Under-21s | 0% employer NIC up to £50,270 |
| Apprentices under 25 | 0% employer NIC up to £50,270 |
| Freeport and Investment Zone employees | 0% up to £25,000 in qualifying cases |
Veterans relief can be claimed in addition to the Employment Allowance.
Recruiting veterans
Service leavers bring skills in logistics, engineering, IT and management. Schemes such as the Career Transition Partnership help employers advertise roles to people leaving the forces, and the NIC saving helps with the cost of training a new recruit.
If you missed it
If you didn’t use category V when you should have, you can correct your payroll submissions and reclaim the overpaid employer NIC for the relevant year, as long as the 12-month period and time limits haven’t passed.
Payroll tip
Add a question about armed forces service to your new starter form. It takes seconds and makes sure you don’t miss the relief.
Frequently asked questions
Do I need HMRC’s permission?
No, you apply the relief through payroll.
Does it apply to part-time veterans?
Yes, there’s no hours condition.
What if a veteran was self-employed first?
Self-employment doesn’t count as civilian employment for the start date.
Can a company director qualify?
Yes, if they’re a veteran employee of the company.
Related: HMRC’s consultation on the NIC holiday for veterans, casual workers on payroll and employing family members.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with employer National Insurance reliefs. See our small business accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
