Employer National Insurance relief in Freeport tax sites

01 March 2022

Her Majesty’s Revenue and Customs (HMRC) has published guidance on the topic of claiming relief from employer class 1 National Insurance contributions (NICs) when employing someone in a Freeport tax site.


There’s a reminder that employers can’t claim until the relevant Freeport tax site has been designated. A list of those designated sites can be checked here.

The relief can be claimed by those who have a business premises in a Freeport tax site.

To be eligible, employees must:
•    Spend at least 60% of their working time in the Freeport tax site. This is unless adjustments have been made to accommodate disability, pregnancy or maternity
•    Be new employees from 6 April 2022, and before 6 April 2026, within the first 36 months of their employment
•    Not have been employed by the new Freeport employer or a connected employer in the previous 24 months.

The relief

Employers will only pay secondary class 1 NICs if the employee earns more than the Freeport Upper Secondary Threshold (FUST), which is £25,000 per year for tax year 2022/23.

The relief can be claimed for new employees for a period of 36 months from the start of their employment if they meet the qualifying conditions.

To claim the relief, the relevant NICs category needs to be applied:
•    F – standard letter equivalent
•    I – married women and widows entitled to pay reduced NICs
•    S – employees over state pension age
•    L – employees who can defer NICs.

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