The CIPP’s response to the HMRC consultation: ‘Supporting veterans’ transition to civilian life through employment’

12 October 2020

HMRC published a consultation, which ran from July 2020 to October 2020, and sought to gain feedback on how a new employer’s 12-month National Insurance (NI) contributions holiday for businesses employing veterans could potentially work. The CIPP’s Policy and research team hosted a survey, and held a virtual thinktank roundtable meeting to collate the views of payroll professionals, in order to shape the CIPP’s formal response to HMRC.

The consultation focused on four key areas, which were:

  • Definitions
  • Eligibility
  • Administration
  • Record-keeping and evidence requirements

Of utmost concern to CIPP members, who responded to the survey or attended the meeting (or both), was the proposed transitional arrangement for the initial year that the policy will be implemented in, in tax year 2021-22. The current intention is for employers to continue to pay employer NI contributions as normal on the wages of the veterans, to then receive a credit back to their PAYE accounts for the relevant amount after submitting a Full Payment Submission (FPS), from April 2022 onwards. From April 2022, the relief can be claimed in real time, as a payroll solution will be possible by that point.

The reaction to this was that it seemed too complex, and that an existing NI category that provides employer NI relief in much the same way should be utilised, or even a new category set up, so that employers have access to the entitlement in line with the date that the policy is first implemented.

Some other key points raised included:

  • Over 80% of survey respondents agreed that a consistent definition of armed forces applied by Government should be used for this policy, with 80% also in agreement that reservists should not be included as veterans for the purposes of an employer NI contributions holiday
  • There was unanimous agreement (100%) that amending the PAYE Starter Checklist to accommodate questions around this relief would not deter employers from employing veterans and claiming the relief
  • The majority (64%) of those who completed the survey felt that this new entitlement would not incentivise employers to take on more, or their first, veteran(s). From comments, it is apparent that businesses will employ veterans based on their skill set and experience, as opposed to an employer relief

Read the CIPP’s consultation response in full here.


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