SolvedNIM01445 | Class 1 structural overview: Zero-rate of contributions for Armed Forces Veterans: assessment
From HM Revenue & Customs · National Insurance Manual
The examples below use the rates and thresholds that apply for the 2025 to 2026 tax year.
Example 1
A monthly paid Veteran has earnings of £1,600 in May 2025. The earnings fall below the Veterans Upper Secondary Threshold (VUST).
| Threshold | NICs Calculation | NICs Due |
|---|---|---|
| Primary | £1,600 - £1048 = £552 x 8% | £44.16 |
| Secondary | £1,600 - £417 = £1,183 x 0% | £0 |
| Total NICs Due | £44.16 |
Category V should be used.
Example 2
A monthly paid Veteran has earnings of £6,000 in May 2025. The earnings are above the monthly Veterans Upper Secondary Threshold (VUST).
| Threshold | NICs Calculation | NICs Due |
|---|---|---|
| Primary | £4,189 - £1048 = £3,141 x 8% | £251.28 |
| Primary | £6,000 - £4,189 = £1,811 x 2% | £36.22 |
| Secondary | £4,189 - £417 = £3,772 x 0% | £0 |
| Secondary | £6,000 - £4,189 = £1,811 x 15% | £271.65 |
| Total NICs Due | £559.15 |
Category V should be used.
Example 3
A monthly paid Veteran has a 12 month relief period which ends during the tax year on 16 September 2025. They are paid £1,400 on 30 September 2025.
| Threshold | NICs Calculation | NICs Due |
|---|---|---|
| Primary | £1,400 - £1,048 = £352 x 8% | £28.16 |
| Secondary | £1,400 - £417 = £983 x 15% | £147.45 |
| Total NICs Due | £175.61 |
As payment is made on 30 September 2025 and the Veteran is now no longer eligible for the zero rate of secondary NICs up to the VUST. Category letter V should not be used for this or for subsequent earnings periods.