As accountants with a firm commitment to supporting our community and clients, for this month’s blog, we wanted to highlight a lesser-known but incredibly valuable detail in the UK tax system—the Veterans Upper Secondary Threshold (VUST). Whether you’re a veteran entering civilian employment or an employer keen to hire ex-service personnel, understanding VUST can offer significant financial benefits.

What Is VUST?

The VUST, or Veterans Upper Secondary Threshold, is part of a government initiative to support former members of the UK Armed Forces as they transition into civilian work. It refers to a specific earnings level—currently set at £50,270 for the 2025/2026 tax year—which determines the point at which employers begin paying standard National Insurance contributions (NICs) for eligible veteran employees.

National Insurance Relief for Veterans

Under this scheme, employers do not have to pay secondary Class 1 NICs on the earnings of qualifying veterans up to the VUST. This zero-rate applies for 12 months from the start of a veteran’s first civilian job after leaving regular service.

To clarify:

• Earnings up to £50,270 = 0% employer NICs
• Earnings above £50,270 = Standard employer NICs apply

This isn’t just a symbolic gesture—it’s a meaningful financial incentive designed to encourage businesses to hire veterans, recognising the value they bring to the workplace.

Why This Matters for Employers

For employers, particularly SMEs, every cost-saving opportunity counts. Hiring a veteran and making use of the VUST scheme could translate into several thousand pounds in NIC savings over the course of a year.

Moreover, veterans bring with them a wealth of experience—leadership, discipline, problem-solving, and resilience—that can significantly benefit your team and culture.

As accountants, we’re advising our clients to:

• Check veteran status at the point of hiring
• Record the employment start date to ensure the 12-month relief is applied correctly
• Use the correct National Insurance category letter (‘V’) when running payroll
• Monitor when the 12-month relief period ends and when the veteran’s earnings exceed the VUST

A Win-Win: Supporting Veterans and Building Stronger Teams

The VUST scheme is a shining example of how tax policy can deliver social impact. It rewards employers for doing the right thing—offering meaningful employment to those who have served our country—while helping veterans transition more smoothly into civilian life.

At our firm, we’re proud to help employers make the most of this initiative and guide veterans through the financial implications of starting their post-service careers.

If you’re unsure whether your business could benefit from the VUST scheme, or you’d like to understand how it impacts your payroll and reporting, get in touch with our team – you can find our email and phone number here or get in touch with us via Business WhatsApp. We’re here to help you support our veterans—and strengthen your business in the process.

Sources: gov.uk; Start Up Loans