Veterans NI Update

26 October 2021

HMRC has released updated guidance for developers on the National Insurance Contributions (NICs) Holiday for Employers of Veterans (NHEV). 

NIC category “V” will be used for NHEV, this mirrors existing letter “A” only. Where a veteran employee would be on a different category (B, T, C, W, J or Q), the standard category should continue to be applied. As this occurrence should be uncommon, HMRC is advising that employers make contact at the end of the tax year to arrange a manual adjustment for the overpaid NICs.

Within the document it lays out how the retrospective adjustment process will work for tax year 2021/22. 

Employers who are not existing users of HMRC’s Basic PAYE Tool (BPT) or cannot use their payroll software to retrospectively apply the veteran category will be able to write to HMRC from 06/04/22 to request relief. The relief should only be claimed in this way if employers are unable to self-serve through software.

In the letter they will need to include:

• the reference (heading) ‘Overpaid NI contributions’
• their employee’s name, date of birth and National Insurance number
• an explanation that they are reclaiming Veteran’s relief
• the period they have overpaid in
• confirmation that they are claiming for a qualifying veteran and retain evidence to show this (HMRC may request to see this evidence at a later date)
• the account number, sort code and account name for the bank account where they want their refund to be paid

Claims for one employee to be sent to:
HM Revenue and Customs 
National Insurance Contributions and Employer Office 
BX9 1AN 

Claims for more than one employee to be sent to:
HM Revenue and Customs 
National Insurance Contributions and Employer Office 

Further information for employers on claiming for 21/22 outside of RTI will be  published on GOV.UK

The NHEV is available for a 12-month period which is set by the employee's first day in civilian employment and is not affected if an employment ceases. This means that subsequent employers can claim this relief if the veteran changes employments within the qualifying period.

HMRC will not be requiring software to validate qualifying dates, however, they will implement a warning message for employers where category V is used for longer than 12 months.

Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information.