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Claiming veteran and freeport NICs reliefs

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The National Insurance Contributions Act 2022 (Application of Part 1) Regulations, SI 2022/307 ensure that the veterans and freeport secondary Class 1 NICs reliefs will apply where an employment is eligible for multiple rates of NICs, but where HMRC has not assigned the relevant NICs category letters.

In most cases, HMRC expects the new reliefs to be claimed by employers through their payroll software using the relevant NICs category letters. A small number of cases will, however, not be covered by the NICs category letters. These are likely to include cases where special rates of NICs apply, where the earner qualifies for multiple NICs categories (e.g. mariners).

Rather than deploy a digital solution for these cases, HMRC has set up a manual process to allow employments to benefit from multiple reliefs. In these circumstances, employers will not be eligible for the freeport or veterans reliefs until the end of the tax year, at which point they will need to make a manual claim. The regulations come into force on 6 April 2022.

HMRC’s Technical note on the powers in the National Insurance Contributions Bill 2021 (28 July 2021) sets out the background to the regulations.

Issue: 1569
Categories: News