Philip Sinclair, the Defence Regional Employer Engagement Director for the West Midlands, explains about the National Insurance contributions holiday for veterans incentive for businesses to employ former members of the Armed Forces.
“Now that the dust has settled on the recent autumn budget announcement, and the implications of the increase in employer National Insurance contributions to 15 per cent begins to dawn, especially for small businesses, how many of you are aware that there exists a National Insurance contributions holiday for qualifying businesses?
Introduced in April 2021, the National Insurance contributions holiday for veterans is aimed at businesses, as an incentive to employ former members of the Armed Forces who are seeking their first employment out of uniform.
The relief is available for 12 consecutive months from the first day of civilian employment and is applied through PAYE.
It is available to a veteran who has started their first civilian job, regardless of when they left the regular Armed Forces and only applies to the part of the employee’s earnings below the veterans upper secondary threshold.
Further details are available at National Insurance Contributions relief for veterans as an employer.
Whilst the impact of this relief might be relatively small, it does help, and therefore encouraging recruitment, in particular from the service leaver talent pool where you are more likely to find candidates that are looking for their first civilian job, makes good business sense.
The question is how do you best attract service leavers into your business? Well, one solution would be to become a signatory of the Armed Forces Covenant and then subsequently become a silver and then a gold award holder of the Defence Employer Recognition Scheme (ERS).
The Armed Forces Covenant serves to act as a flag of support to members of the Armed Forces community, but the Defence ERS serves to throw a spotlight on those employers who are prepared to invest in employing members of that community, recognising the skills and experience they can bring into business.
Recipients of the ERS silver and gold awards will have made tangible commitments in their recruitment and selection policies, and in their HR policies to encourage recruitment of members of the Armed Forces community, in particular Reservists.
They have to meet certain essential criteria, included in which is a commitment in HR policies for the provision of additional leave to allow serving Reservists to complete their annual mandatory training commitments.
At the silver level, a minimum of five days paid or unpaid additional leave is the standard, whilst at gold that commitment increases to 10 days additional paid leave. That gold level commitment is likely to be particularly attractive to service leavers, who might want to retain links with the Armed Forces by joining the Reserve Forces, even if only for a brief period, as an aid to transitioning out of uniform.
By being an ERS silver or gold award holding business, you are sending out the message that you will support that transition.
There are plenty of other tangible benefits to becoming Armed Forces Covenant signatories, and participants in the Defence ERS awards.
- The Armed Forces Covenant allows your business to focus their support for the Armed Forces community in a single document, forming the foundation for a partnership with Defence.
- Signing the covenant means that you are supporting your employees who choose to serve the nation as Reservists (Reservists represent 18.5 per cent of the operational capability of the UK Armed Forces).
- Signing the Covenant will allow you to demonstrate that you are Forces Friendly, thereby attracting military personnel to your business.
- Corporate Social Responsibility (CSR) – Defence sits at the heart of communities. Becoming Armed Forces friendly allows you to align some of your CSR and ESG objectives in support of Defence.
- This is a great opportunity to network with other Forces Friendly employers at our many local engagement events every year.
- Closer working links with Defence could allow more opportunities to work together for mutually beneficial objectives i.e. staff training, free recruitment support and adult volunteering opportunities for staff through the Cadet Forces.”
Should you wish to explore further how your business might benefit by becoming signatories, reach out to Philip Sinclair at [email protected].
